Mr. Speaker: I have a few matters that were carried over from yesterday's session.

HANSARD RECORD

Mr. Speaker: I would first of all like to refer to the matter raised by the member for Don Mills (Mr. Timbrell). I have received the report from the Hansard editor which confirms the member's statement. He reports with regret that an error was made and the sentence referred to by the member was inadvertently omitted in the copy transmitted to the printer.

The editor has apologized for this omission and has assured that an erratum notice will appear in the next House Hansard.

EMERGENCY FACILITY

Mr. Speaker: The next item is with reference to the matter raised by the member for Brantford (Mr. Gillies). He rose to submit that his remarks had been misconstrued by the Minister of Health (Mr. Elston). The precedents are ample that a member may rise to explain a material part of his speech that is misunderstood, but in such case he may not introduce new matter. I refer you to standing order 19(d). Again, it does not refer to any of the recognized privileges of parliament.

URBAN TRANSPORTATION DEVELOPMENT CORP.

Mr. Speaker: Yesterday, the member for York South (Mr. Rae) raised a matter of privilege with respect to comments made by the Minister of Industry, Trade and Technology (Mr. O'Neil) last Friday concerning the possible sale of the Urban Transportation Development Corp.

The member for York South stated that the minister had made one statement to the House during oral question period and later qualified and changed the statement outside the House in remarks made to the press. As a consequence of these statements, the member for York South argued that he had been misinformed by the answer given by the minister with respect to the policy of the government on the sale of the corporation.

In response, the minister acknowledged that outside the House he had stated that he should not have told the House that he could make the guarantee of no loss of jobs, as he has ascertained since making his statement in the House.

It may be useful to stress the very nature of parliamentary privilege. Standing order 18(a) defines privilege as "the rights enjoyed by the House collectively and by the members of the House individually conferred by the Legislative Assembly Act and other statutes, or by practice, precedent, usage and custom."

Erskine May's Parliamentary Practice defines privilege as "the sum of the peculiar rights enjoyed by each House collectively as a constituent part of the High Court of Parliament, and by members of each House individually, without which they could not discharge their functions, and which exceed those possessed by other bodies or individuals."

The privileges of the House or of its members include the right of free speech in parliament; immunity from arrest, detention or molestation for civil causes during defined periods; immunity of members from the obligation to serve on juries; the right of the House to set up its own rules; the power to expel members, and the power to order the arrest and imprisonment of persons guilty of contempt or breach of privilege.

I stress the essence of the definition of privilege itself so that honourable members will realize that it is only in very extreme circumstances that there can come to this House a legitimate case of privilege on the basis of the real and accepted and traditional definition of parliamentary privilege.

Both Beauchesne and Erskine May make it clear that the Speaker's role is to decide whether or not the member has an arguable point on which a motion may be based. Until he has decided this point, no motion is in order. Further, Beauchesne's fifth edition states that "statements made outside the House by a member may not be used as the base for a question of privilege."

In the present case, there is no breach of any recognized privileges of parliament which, as illustrated by the foregoing examples, are those privileges that members have that persons or bodies do not. Therefore, no motion is in order in this instance.

PRESENTATION

Mr. G. I. Miller: On a point of information, Mr. Speaker: I would point out to the members that, to get us into the spirit of Christmas, the apples that are on members' desks today were grown in the fine orchards in Victoria, just south of Simcoe. They are Delicious apples, and we hope members enjoy them as we get into the Christmas spirit. I hope members will not use them for ammunition as we get a little out of control at times in the Legislature.

CHILDREN'S AID SOCIETY

Mr. R. F. Johnston: On a point of privilege, Mr. Speaker: I rise to correct the record from yesterday, when I made an error of which I would like to advise the House. While asking a question of the Minister of Community and Social Services (Mr. Sweeney), I said that his ministry was directly running the Kenora-Patricia Child and Family Services and that he was therefore responsible for matters there.

Today I would like to rise and recognize that in October 1984, through order in council, the past minister, Mr. Drea, did set up a board. I will quote from Mr. Drea's statement of that time:

"This new corporation will acquire its board of directors over the next several months, while my ministry continues to operate and manage the corporation.... Later, my ministry will assist in the role of a trustee until the new corporation is able to fulfil its total mandate without ministry assistance."

He then did set up a board of up to 13 people. My point is that even though four Indian chiefs were supposed to be on that board and although four municipalities were supposed to be represented on that board, plus people from the community, there are only two people on that board. They now meet with three members of the ministry and they deal with negotiations. Therefore, I was not incorrect in asserting that the ministry is controlling this board very directly in negotiations, and the minister should intervene to make sure he stops this strike.

Mr. Speaker: That is not a point of privilege. However, I would inform all members that there are other methods, such as a point of personal explanation, that may be covered under that.

2:10 p.m.

Mr. Pierce: Mr. Speaker, I rise on a point of privilege. I believe my privileges as a member of this House have been damaged. This past weekend, the Minister of Northern Development and Mines (Mr. Fontaine) told the Fort Frances town council, "Jack Pierce and Leo Bernier are liars." His direct quote is: "And if you don't believe me, go and ask God."

Mr. Speaker: Order. The honourable member said he was getting up on a point of privilege. He has been telling me what happened outside the House. I have to say that is not a point of privilege.

Mr. Pierce: It is certainly a damaging statement to be made by any member of this House.

Mr. Speaker: Order. Would the honourable member resume his seat? It is not a point of privilege.

Mr. Gillies: Are you going to let the minister get away with that, Mr. Speaker?

Mr. Speaker: Order.

MINISTER'S BIRTHDAY

Hon. Mr. Nixon: Mr. Speaker, just before you call the order for statements by the ministry, I too have a point of order. It would be disorderly if we did not have a chance to wish the Minister of Agriculture and Food (Mr. Riddell) a happy birthday after all the hard work he has done in these past few weeks.

STATEMENTS BY THE MINISTRY

QUEEN'S COUNSEL

Hon. Mr. Peterson: There has been substantial public and professional criticism for many years about the practice of cabinet's granting letters patent of Queen's Counsel to lawyers of Ontario. As long ago as March 5, 1974, Mr. Justice Sydney Robins of the Ontario Court of Appeal, then the treasurer of the Law Society of Upper Canada and the holder of a Queen's Counsel appointment, said in an address to the Hamilton Lawyers' Club, "The whole system of awarding QCs is, in my view, misleading to the public and unfair to the legal profession."

Unfortunately, the situation described remains the same today. As recently as October 25, 1985, the Law Society of Upper Canada issued a communiqué to its members stating that the benchers recognized that the granting of QCs "has not been clearly related to the recognition of excellence at the bar." Moreover, no significant plan for reform has been instituted or even proposed in the past 20 years. The time has therefore come to abolish the system now.

Consequently, I am pleased to announce that our government intends to abolish the designation of Queen's Counsel and revoke all existing provincial Queen's Counsel appointments in Ontario.

There are several reasons we are taking this action. First, it was intended that the Queen's Counsel appointment be modelled upon the English tradition. The legal profession in England is divided into two discrete components, barristers and solicitors. The appointment of Queen's Counsel in England is available only to barristers, not solicitors, and is based exclusively upon proven excellence as a courtroom advocate. I have the greatest admiration for those who have attained the stature of Queen's Counsel in England, based as it is on merit before Her Majesty's courts.

In our province, however, the practice of previous governments has been that any member in good standing of the Law Society of Upper Canada, whether a corporate lawyer, a courtroom lawyer or even a lawyer working in the private or public sector and not actively engaged in the practice of law, may be appointed a Queen's Counsel. Excellence in advocacy at the bar has not been a prerequisite to a Queen's Counsel appointment.

The second reason we are abolishing the Queen's Counsel designation in Ontario is that it misleads the public. I again quote Mr. Justice Robins from his speech to the Hamilton Lawyers' Club on March 5, 1974: "All too often the profession is left with the conclusion that this honour is granted more on the basis of who one knows rather than what one knows."

The third reason for abolishing the Queen's Counsel is that it has become unfair even to the practising lawyer. Lawyers themselves have become victims of the system. While it may not be a mark of merit to have a Queen's Counsel, it may be considered a mark of demerit not to have one at a certain stage of one's career and may even subject that lawyer to a competitive disadvantage among his peers for reasons wholly unconnected with his abilities in the law. Clients may attach unwarranted prestige to the designation. As a result, lawyers are pressured by the system to engage in an unseemly lobbying effort with other lawyers, influential citizens and politicians to secure the Queen's Counsel appointment.

The fourth reason for abolishing the Queen's Counsel designation is that the appointment, having strayed so far in Ontario from its traditional English roots, stands alone as an honour bestowed by government on the legal profession at a time when no similar honours are granted to members of any other profession. The time has come to end this practice. We believe it is good policy to acknowledge distinguished public service by members of professional groups in Ontario. Such reward, however, should be distributed exclusively on the basis of achievement and, in any event, should not be limited to the legal profession.

Finally, we are abolishing the Queen's Counsel in Ontario because it has been used by previous governments as a form of political patronage. In its own way, I suppose, it has been the best form of patronage, if patronage is what we must have in Ontario politics: it is cheap, costing the taxpayers nothing; it gives the appointee a form of distinction, dubious though it may be, and it is essentially harmless. This government, however, makes its appointments on the basis of merit alone, on the basis of what a person can do rather than on whom a person knows. This government intends to appoint the best people, regardless of political affiliation, to assist us in the business of government.

The Attorney General (Mr. Scott) has written today to his colleague the Minister of Justice, John Crosbie, advising him of our action and asking him to make no new appointments of federal QCs in our province. He has also asked Mr. Crosbie to act in concert with this government by revoking all existing federal QC appointments in Ontario.

The Attorney General has also written to the Law Society of Upper Canada advising it of our action. I am mindful that the law society recently passed a motion calling for reforms in the appointment of Queen's Counsel. I believe our action today follows the spirit of that proposal, and we look forward to working with representatives of the bench and bar to see if we can return the method of appointing Queen's Counsel to its merit-based English roots of excellence in advocacy before the courts.

Interjections.

Mr. Speaker: Order.

[Interruption]

Mr. Speaker suspended proceedings at 2:19 p.m.

The House resumed at 2:24 p.m.

Mr. Brandt: On a point of privilege, Mr. Speaker: Relating to the announcement made by the Premier, I resent the inference that the appointments were political with respect to Queen's Counsels. Of the last three appointments in my riding, two were --

Mr. Speaker: Order. The honourable member will take his seat.

FOREST MANAGEMENT AGREEMENTS

Hon. Mr. Kerrio: I announced in this Legislature October 18 that the government is undertaking a number of initiatives to bring the public up to date on the health of Ontario's forest estate. One of those initiatives is the tabling of the first five-year reviews of forest management agreements signed in 1980.

The companies involved are Abitibi-Price Inc., Great Lakes Forest Products Ltd., Spruce Falls Power and Paper Co. Ltd. -- each holding one forest management agreement -- and E. B. Eddy Forest Products Ltd. which signed two FMAs in 1980. A further 21 agreements have been signed since then. They too will be reviewed every five years.

This government believes forest management agreements are the right approach to timber and resource management on publicly owned lands. They require that a company that cuts trees on a specific tract of land also takes on the responsibility for timber management on that land. Timber management includes preparation of plans, regeneration, tending, site preparation and road construction. This makes for maximum efficiency.

Companies that know they are responsible for managing the same site will alter the way they harvest and clean up an area. They can take care to prepare the site while they harvest. The results of these first reviews of FMAs bear out the ministry's wisdom of replacing the old-style timber licences with forest management agreements.

When members look at these figures, they will see that fully 63 per cent of all harvested lands were regenerated by the forest companies, compared to 51 per cent regenerated by the ministry before the inception of FMAs. The 63 per cent that has been regenerated is far from the end of the story. That figure represents what has been treated. As honourable members realize, virtually all other areas will regenerate naturally. These areas will not enter an inventory system until they are surveyed.

I should point out that the companies are responsible for maintaining productivity on the FMA area and will have to re-treat any regeneration failures at their cost and according to the conditions in the agreement, so the final figures are not all in. We are impressed by the figures that are in. We have significant improvement, targeted at the most productive sites, which means the quality of our forest estate is actually improving.

2:30 p.m.

Before turning to the figures we have, I would like to point out to members that prior to FMAs the ministry was responsible for regeneration, so the companies that signed the first agreements did not assume the total responsibility immediately. One cannot switch from harvesting to complete timber management overnight. There was a phase-in period.

The new duties require companies to make major adjustments in their organizations to hire new staff, reallocate existing staff and upgrade technical skills. For the first year, the ministry helped with regeneration and site preparation. The companies very quickly took over the responsibilities for regenerating, tending and site preparation, and by the fifth year were doing all this work.

The results of these reviews show that the volume of timber management activity has doubled since the companies became involved. Let me say in passing that not every square kilometre in those areas is productive forest land. For example, in the Abitibi-Price forest management agreement, only about three quarters of the land is capable of growing trees. The remainder, which includes water and wetlands areas, is not suitable for growing forests.

Let us move now to the heart of these reviews. In terms of area under forest management agreements, they show there was a 43 per cent increase in regeneration, a 285 per cent increase in tending and a 30 per cent increase in site preparation, all of this with only a 15 per cent increase in the amount harvested.

In the first five years the agreements were in effect, the companies harvested a total of 107,743 hectares, regenerated 68,065 hectares, tended 57,267 hectares and did site preparation on 62,340 hectares. In the five years prior to the agreements, on the same land the companies harvested 93,518 hectares of forest land and the Ministry of Natural Resources regenerated 47,702 hectares, tended 14,840 hectares and did site preparation on 47,702 hectares.

The companies also fulfilled their other obligations under the terms of the agreements by involving the public in planning forest activities, altering activities to safeguard such important considerations as wildlife habitat and recreation areas, and keeping complete work records. In some cases, the companies either came up with new advances in forest technology or took extra time to improve the forests for which they now are responsible.

Great Lakes Forest Products converted harvesting machines to enable the company to prepare soil on difficult sites. Both Abitibi-Price and Spruce Falls Power and Paper purchased special wide-tired harvesting machinery to protect sensitive areas and to improve the timing of harvest activities. E. B. Eddy Forest Products is replacing residual hardwood stands with valuable softwood plantations, even though the original plans would have permitted natural regeneration of these sites to low-value hardwoods such as birch and poplar.

Those are a few highlights from the reviews I am now tabling. The reviews presented are the first to be tabled and, therefore, they assume a significant role in relaying to the public the results of timber management activities undertaken by the FMA holders. We will continue to table the reviews of all FMAs as the five-year anniversary dates come due.

Given the kind of tending and forest management that is going on, I expect to be here five years from now presenting another report as I have today.

Mr. Harris: Mr. Speaker, on a point of order: I congratulate the minister on the statement and the announcement today. However, I am missing the last page that refers to the member for Muskoka (Mr. F. S. Miller), James Auld, the member for Cochrane South (Mr. Pope) and myself, the member for Nipissing, for implementing the FMAs. Could he send that over?

Hon. Mr. Kerrio: That is a very valid point. When I can find something of significance in the records that I should tell about, I shall do so.

Mr. Speaker: Order. It would have been better to have brought that up during question period.

UNIVERSAL DECLARATION OF HUMAN RIGHTS

Hon. Mr. Wrye: I want to bring to the attention of the members of this House that December 10 is a special day in this province and around the world. It was 37 years ago today when members of the United Nations signed the Universal Declaration of Human Rights. It marked the first time that countries paid recognition to the inherent dignity and the equal and inalienable rights of all members of the human family.

The proclamation in 1948 by the General Assembly of the United Nations was a major step forward in the history of international affairs and the advancement of the human race. The document serves as a model and an inspiration for human rights legislation throughout the free world.

The Ontario Human Rights Code, proclaimed in force 23 years ago, draws its inspiration from that declaration and upholds the fundamental principles enshrined in it. The Ontario Human Rights Commission plays a crucial role in this province. Its mandate is to create at the community level a climate of understanding and mutual respect in which every person in the province is equal in dignity and rights. There is a need to foster within all people a greater awareness of the importance of human rights.

In this province, discrimination is not only immoral, it is also illegal. When discrimination occurs, the full force of the law will be brought to bear. At the same time, educational and preventive programs are carried out by the commission to combat effectively the prejudice that leads to discrimination. Recently in this House, I announced that the Ontario Human Rights Commission will be receiving additional resources, including 41 new staff positions. This action demonstrates the commitment of the government in this most important area.

Racial harmony in our society is of paramount importance to this government and every member in this House. Ontario was the first province to establish a race relations division of the human rights commission and to appoint a race relations commissioner. Last week, the government announced the appointment of Dan McIntyre as Ontario's new race relations commissioner. Furthermore, the cabinet committee on race relations is examining ways and means of strengthening the government's policy statement on race relations and augmenting the various race relations activities and programs. One such area relates to appointments to agencies, boards and commissions. It is our intention that the members of these bodies should reflect the racial diversity of our population.

At this time, on behalf of Ontario, I wish to recognize December 10 as Human Rights Day and December 9 to 15 as Human Rights Week. At the same time, I wish to declare Ontario's support for the United Nations' second decade to combat racism and racial discrimination. I call upon every member of this House to reaffirm the commitment and support for human rights, one of the most fundamental contributors to the great democracy we enjoy in Ontario.

ORAL QUESTIONS

URBAN TRANSPORTATION DEVELOPMENT CORP.

Mr. Grossman: I have a question for the Premier. We wanted to give him the opportunity this afternoon to select any one of the answers that the Minister of Industry, Trade and Technology (Mr. O'Neil) has been giving for the last couple of days. My advice to the Premier, to make it easy for him, is that he could select either the House answer the minister gave or the answer he gave to the hall question. The Premier can answer by saying "Hall" or "House" for us so we would understand which one he has selected.

Mr. Speaker: Question?

Mr. Grossman: We have been chatting with the Minister of Industry, Trade and Technology --

Hon. Mr. Bradley: Who gave money to Moe Carter?

Mr. Grossman: The member for St. Catharines (Mr. Bradley) can have his job soon.

Mr. Speaker: Order, order. Question?

Mr. Grossman: We have been talking with the Minister of Industry, Trade and Technology about the 21 letters that obviously John Kruger and perhaps the Premier himself sent out with regard to the sale of the Urban Transportation Development Corp.

Is the Premier willing to tell us whether any of those 21 letters went out to non-Canadian companies? Did the letters indicate that any offer to purchase must include job guarantees, a guarantee that the research and development would be left in place and that the plants in Kingston and Thunder Bay would be protected?

Hon. Mr. Peterson: I think the answer to all of those questions is yes.

2:40 p.m.

Mr. Grossman: That is very good. The answer to the first question then contradicts the Minister of Industry, Trade and Technology when he said no foreign firms had been talked to. Does the Premier confirm that he has offered UTDC or invited foreign firms to purchase UTDC? That was the first answer he gave this afternoon.

Second, given the incredible answers we have been getting over the last few days, I know the Premier will understand our desire to get the kind of information we only got yesterday from de Havilland in its briefing. Therefore, would the Premier be kind enough to table copies of the 21 letters that have been sent out so we can see for ourselves the guarantees he has demanded?

Hon. Mr. Peterson: As the member knows, there is a review of the crown assets going on at the present time. That is common knowledge. We are looking to maximize the return and the opportunity for jobs in research and technology in this province.

I point out that no deal has been signed. We have not talked to any foreign firms. There was some preliminary prospecting. There have been some discussions with some domestic firms. Nothing has been signed at the moment.

The member wants to be included in the negotiations or he wants the letters tabled. The answer to his question is the same as I am sure he would have given me if he was in the government and I asked him the same question. The member said in Hansard on April 16, 1982: "Negotiations cannot...be conducted through the media and should not be conducted through the media. I have adopted that stance in the Chrysler negotiations, Massey-Ferguson negotiations...." I am sure the member would understand that.

Mr. Bennett: We are not suggesting that for a minute. The Premier knows that --

Mr. Speaker: Order.

Mr. Rae: The problem is that the answer from the Premier is exactly the same answer we had from the Tories. They are both in favour of flogging off public assets at fire-sale prices.

Can the Premier explain why the government is so eager to sell public control of a crown corporation that is engaged in making sales of $300 million, $500 million and $800 million, when all the prospective buyers are in the public sector around the world? When it is government-to-government contacts that make the most sense, why in this instance, in a company that is beginning to find financial success, is the Premier so eager to deprive the crown and the public of this province of the advantages of good, well-run public enterprise?

Hon. Mr. Peterson: I would like to respond to the honourable member's question because it is a legitimate area for debate. There may be certain philosophic differences between us. He thinks the government should own more corporations than I do. However, it is a legitimate question and deserves a full answer.

The honourable member will be aware there is roughly $5 million worth of equity injected by this government as well as an additional $10-million write-up on the test track. This government has supported it to the tune of about $163 million in various purchases and otherwise.

Since 1975 -- and I can go into detail on it if the member would like to hear it -- this company has lost $17.8 million. Taking all the winning years and all the losing years and netting them all out, it has lost that amount of money. There is a substantial body of opinion that believes at this particular point it would be worth while to privatize it or have some element of private contribution in order to expand its marketing potential and build it into a world-class competitor.

I refer the member to the former minister, James Snow, who said on December 5, "Philosophically, I have no problem whatsoever and would prefer to see major private sector ownership of UTDC eventually."

There are a number of reasons. UTDC has grown far beyond its original intentions. As the member knows, it started off as a research and development company and expanded into manufacturing. It needs international orders to grow and thrive. There is no question that government ownership creates problems. For example, every time there is a problem with a truss falling over in Detroit, it becomes a question in this House, which is a system of accountability that is not there for so-called private enterprise.

We have talked to a number of people in the business who feel UTDC could grow and expand if it had a private component. There are some areas of the business it could enter into right now, but it feels precluded from entering into them because of the public involvement and because it would be competing against the private sector.

For all those reasons, a strong body of opinion believes it is worth while at least to pursue discussions about or look at the options for privatization. I point out to the member again that no final decision has been made. There have not even been negotiations on any details. Any deal that is made would obviously be subject to the scrutiny of this House.

Mr. Grossman: I have to point out to the Premier that he has read a quote that was necessary because the government at that stage was dealing with some confidential information.

Interjections.

Mr. Grossman: John Kruger may have given him this answer, too. Kruger may have briefed him.

The government was at the final stages of negotiations, with specific details on the table. Is the Premier telling the House that he has distributed specific business details of UTDC's operations to 21 firms, including foreign firms, which by his own admission are firms that are competitors of UTDC -- details so specific and detailed with regard to UTDC's operations that he cannot table them in the House? Is the problem that he has already given away confidential details with regard to UTDC to all of those 21 companies, hampering its competitive position? That is the only circumstance under which he cannot table the letters.

Hon. Mr. Peterson: Obviously, we would not give away confidential details at this point. The only question the member is asking today is that we table information. Why does he not think up some more intelligent questions? Why does he not ask me why we want to sell it? Why does he not tell me what his position is?

If the member has any questions, he should put them in Orders and Notices and I will be glad to share with him. I am sure that as a person who has negotiated for the government, the member is the first to recognize that these negotiations have to be kept close to the vest, at least at this point.

The deal will obviously be subject to scrutiny and we will welcome the member's opinion on it. I would be very happy to know where the member stands. Does he agree with Jim Snow that it should be privatized? If it is privatized, I would like the member's help in doing it. I am sure he could be very constructive in putting it back in the private sector where it could grow and prosper.

Mr. Grossman: I want to say to the Premier that --

Mr. Speaker: New question.

Mr. Grossman: Here it comes.

If the Premier wants to ask me how I feel about Jim Snow, he may want to endorse the remarks of the Solicitor General (Mr. Keyes), who said on December 2, "It may be wiser for UTDC to concentrate its efforts in the area of design, research and development, rather than building the product."

The Premier may want to tell the press when he goes out in the hall whether he agrees with the minister when he says UTDC may not be sensible in building the product any more. That may be why he is selling it.

Mr. Speaker: The Premier.

Mr. Grossman: I want to ask the Premier this question with regard to his trip out west.

2:50 p.m.

Mr. Speaker: Order. Yesterday, I asked the members to show a little more respect for the chair. I asked you earlier if you were going to ask a question. You said you were. I waited, but I did not hear a question. Please ask the question briefly.

Mr. Grossman: I should like to ask the Premier, in the light of his speech to the Conference Board of Canada some time ago, whether he can now tell us what other crown corporations --

Mr. Martel: There is going to be a row in here.

Mr. Grossman: The member for Sudbury East can start asking questions too.

Mr. Speaker: Order. Briefly, the question.

Mr. Grossman: The member for Sudbury East should feel free to ask questions too.

Interjections.

Mr. Speaker: Order. I asked the Leader of the Opposition to place his question, but he did not. You are now placing a supplementary, if you can do such a thing. I am considering it the second part of the question.

Mr. Grossman: What was that?

Interjections.

Mr. Speaker: Order. I have asked the Leader of the Opposition to place his question, and I am considering it as the second part of the question. In other words, I am giving him one question. It is up to the --

Interjections.

Mr. Timbrell: Mr. Speaker, may I rise on a point of order?

Mr. Speaker: No.

Mr. Hennessy: That is it; it is decided.

Mr. Speaker: Order.

Mr. Timbrell: Mr. Speaker, on a point of order.

Mr. Speaker: If I can have a little quiet; what is your point of order?

Mr. Timbrell: Mr. Speaker, I understand your concern, which we all share, for maintaining the decorum and the orderly conduct of the business of the House. However, I would ask you to reconsider, inasmuch as my leader, the Leader of the Opposition, in trying to address his question was interrupted by interjections. With all due respect to the chair, I would ask you to reconsider and allow the Leader of the Opposition to place his second question.

Mr. Speaker: I must remind the members it is up to the Speaker to decide how many supplementary questions there are. If it gets too confusing for the members, I will ask the Leader of the Opposition to place the question and then I will go to some other place for the supplementary if I so desire.

Mr. Grossman: In the light of the Premier's speech to the Conference Board of Canada, wherein he said the government of Ontario might not now need to be in the entertainment business, can he tell us what other crown corporations he and Mr. Kruger might have on the list for sale?

Mr. Haggerty: The Legislature is one.

Hon. Mr. Peterson: The member for Erie made one of his fine interjections.

I can tell the member that we are reviewing all the crown corporations in a systematic way. If he has any suggestions for ones that should be looked at, I would be interested in his opinion. We are looking at the Innovation Development for Employment Advancement Corp., to be specific. We are also looking at Suncor, which has provided a lot of entertainment for this House over the last little while.

Mr. Rae: Can the Premier confirm that while 21 contacts were made, not Mr. Kruger but Wood Gundy is the company that has been hired to deal with this question of privatization of UTDC? They have sent out eight letters; the letters have already gone out. Can he confirm that if an interest is shown a deposit must be paid; and if a deposit is paid at that point serious negotiations are under way?

If that is true, can the Premier tell us whether the government today has a stated preference between a partnership or joint venture with whoever is applying and a complete wholesale sale, a complete privatization? Has the government made up its mind which of those two options it prefers?

Hon. Mr. Peterson: With respect to the specific question, the answer is no. We are looking at both options to maximize the potential. What we want to do is secure that employment and, indeed, enhance that employment. We want more employment here and we are open for suggestions.

The member is quite right that Wood Gundy has been retained to do the evaluation in this matter. I am sorry I cannot confirm his statement there were eight contacts. I am under the impression that originally 20 feelers, as they say, were sent out. The member has the figure eight, and I am not sure where that came from. As far as I know at this point there are only two semi-serious discussions with potential Canadian partners.

Mr. Grossman: Last night 250 UTDC workers met in the Moose Lodge in Thunder Bay. They are very angry and they are now suggesting they may have to rent buses and come down to Toronto to find out what is going on with regard to the sale. No one has spoken yet to the UTDC board about the sale, and obviously no information whatsoever has been given to the union in Thunder Bay.

Given that the Premier will be flying to Vancouver to officiate at the opening of the UTDC project there, I wonder whether he might consider cancelling that trip. Instead of jetting off to Vancouver to take credit for something he has fought for 10 full years, he might consider going to Thunder Bay tomorrow night and speaking to the confused workers there whom no one seems to talk to.

Hon. Mr. Peterson: When I received the invitation to attend the opening tonight and tomorrow in Vancouver, I was not sure it was appropriate. Because of the insistence of Premier Bennett that I be there, I acceded to his invitation. I understand the point the honourable member has raised. A number of those workers, as he will know, have been going through some, shall we say, discomfiture or uncertainty because his government cancelled the GO advanced light rail transit program. His government cancelled it and put their jobs in jeopardy.

Mr. Grossman: No. Why does the Premier not go to Thunder Bay? That is the question.

Hon. Mr. Peterson: Do not give me that stuff. The members opposite are the ones who started the rationalization process.

Mr. Grossman: They want to talk to the Premier.

Mr. Speaker: Order. Twenty minutes of question period have passed.

Mr. Rae: The official position of the Tory party is apparently that of the member for Prince Edward-Lennox (Mr. Taylor), who said in reference to UTDC that "they should not be farming the work out to an obsolete plant in a remote part of the province." That is the Tory attitude to the plant in Thunder Bay. That is the record they have.

Interjections.

3 p.m.

Mr. Rae: I seem to have touched a chord there. As a result of conversations I have had, and have attempted to have, with both Mr. Foley and Mr. Kruger -- and I can tell him that neither has been particularly forthcoming with respect to the negotiating process, which is hardly a surprise -- I would like to ask the Premier this question.

When I asked him how close they were to a deal, Mr. Kruger did venture to say he hoped to have a better idea by the end of the year, but that at the moment there were at least two companies that had expressed an interest, both of which were Canadian.

Since the Premier has not stated his preference here today with respect to the question of a form of partnership, joint venture or a wholesale merger and privatization, a basic giveaway to a private corporation, will he give the House the assurance that no such letters of intent and no such signing of documents will take place until such time as the Legislature has been consulted with respect to those two very vital choices?

Mr. Speaker: Order.

Mr. Rae: Otherwise, we are going to be in exactly the same impossible position we have been placed in by the federal government with de Havilland.

Hon. Mr. Peterson: The honourable member is asking me to turn the responsibility for this deal over to this Legislature. In other words, presumably he would like to bring it back here and debate it. He knows as well as I do how productive that would be. Nothing would ever happen. We would just see our friends opposite shouting at each other and making contradictory statements.

I believe we are charged with the responsibility of protecting those jobs and building UTDC in Ontario to all its potential, we have that responsibility. Let me say very frankly that everything we do is going to be subject to full scrutiny. I welcome the member's ideas, but I honestly do not know how we can have six different people or three different parties negotiating in this kind of situation. I think we have to have the responsibility and, as I said, we are prepared to bear any scrutiny that comes with that responsibility.

Mr. Rae: I wonder if the Premier does not see a certain irony in insisting on having 11 people negotiating free trade with the United States but not being prepared to share responsibility with the Legislature in this matter. Now it is becoming clear why they did not take the Premier seriously on de Havilland: he is not prepared to share information that has to be shared before the fact and not after the fact.

Mr. Speaker: Question.

Mr. Rae: I would like specifically again to get the Premier to focus on this question of why; even granted for a moment for the sake of argument it would be useful for UTDC to have some degree of partnership with the private sector. So many of those negotiations are state to state, government to government. There is no private sector market out there for an $800-million transportation system. It is all handled in the public sector, whether it is on the municipal, provincial, state or national level.

Mr. Speaker: Question.

Mr. Rae: He knows that. Why abandon the role of the public sector at a time when even those people involved in UTDC feel the public sector still has a valid role to play?

Hon. Mr. Peterson: I say to my honourable friend that a number of our worldwide competitors are not government- or state-owned; they are private enterprise. I am not denying that sometimes government has a role, as we have a role with a number of our privately owned corporations selling abroad, and we will always fulfil that role or responsibility. However, I do not think he can assume necessarily that people will buy just because a company is owned by a government. We are prepared to assist them or any other corporation in this province, be they privately owned, publicly owned or a combination thereof, to obtain foreign contracts, and we always will be.

Mr. Grossman: I would like to take the Premier back to the first answer he gave us this afternoon on UTDC. In response to my question with regard to whether the 21 letters indicated to prospective purchasers that maintenance of jobs in Canada -- that is, job guarantees -- was required, he answered yes. His Minister of Industry, Trade and Technology (Mr. O'Neil) said yes to the same question the other day, and then he went out in the hall and said no, he should not have given those guarantees.

Just so we know, when we get a copy of one of those 21 letters, exactly what the Premier's position now is, will he repeat once again, and clarify for me, the answer to the first question he gave today? The question was, did the 21 letters require of prospective purchasers job guarantees for the UTDC workers? He answered yes to that question earlier today. Is that his answer?

Hon. Mr. Peterson: Yes, that is my answer.

Mr. Foulds: Given the attitude of the member for Prince Edward-Lennox and of the member for Kingston and the Islands (Mr. Keyes), will the Premier give us a guarantee the jobs in Thunder Bay and in Kingston will be guaranteed?

Hon. Mr. Peterson: That is a good question the honourable member has asked. As he knows, UTDC is currently going through a job rationalization program. It is looking at that because of the previous government's cancellation of the GO advanced light rail transit program. That is a reality. It is looking now at plans that are possibly going to cut some of that work force. That obviously has to be done as gently as is possible. It is not something I like or support.

We want to see UTDC built into an international-class company that can participate all around the world and have more employment in Thunder Bay, and that is how we are approaching this matter. We will not do anything that will hurt UTDC. We are going to do only things that will help it.

DE HAVILLAND AIRCRAFT OF CANADA

Mr. Rae: I have a new question for the Premier on the subject about which I was briefed together with the leader of the Conservative Party and the Minister of Industry, Trade and Technology (Mr. O'Neil) last night by Mr. Marshall of the Canada Development Investment Corp. I am referring to the de Havilland sale.

Mr. Marshall confirmed that both the previous government and the present government supported the general initiative of the federal government to dispose of de Havilland. He indicated very clearly there was no change in policy or in direction with respect to Ontario's interest as it was expressed to him by various parties.

Given what the Premier and his government now know about the de Havilland sale, is it a deal he favours at present?

Hon. Mr. Peterson: I can tell the honourable member that I have never had any personal contact with Mr. Marshall; I have never met the man. The member will recall, though, that I did convey to the Prime Minister the view of this province with respect to the deal. We did try to intervene on behalf of one of the parties.

There is no doubt in our mind that we would have preferred a Canadian purchaser. There is absolutely no doubt about that.

Mr. Rae: Yes, but the Premier also prefers privatization. Let us look at the reality today. I am asking him today, given what he knows about the size of the giveaway and given what he knows about the paltry sum that Boeing is putting up for this deal, is it a deal he favours at present; yes or no?

Hon. Mr. Peterson: I have told the member I would have much preferred that it be sold to a Canadian company.

Mr. Grossman: Since this deal was entered into and announced, has the Premier demanded of the federal government that some special first option be given to Canadian preferred purchasers, with or without government assistance, or potentially to governments or CDIC, to take back the assets in the event Boeing decides to close the de Havilland plant two or three years down the road?

Hon. Mr. Peterson: I have not been consulted on any extra clauses to put into the contract. I understand Mr. Marshall told the Leader of the Opposition, the leader of the New Democratic Party and the minister yesterday that on Ontario's advice they protected the jobs and the plant in Ontario. I have not been consulted on any other of the niceties of the contractual arrangements.

Mr. Rae: For the record, Mr. Marshall confirmed that the policy of the Tories was in favour of privatization and the policy of the Liberal Party was in favour of privatization. That is why the province today is in the bargaining position it is in. That is the reality of the situation.

Now that we are there, given the Premier's preference, which he stated today -- admittedly in an extremely soft way -- I would like to ask whether he is prepared to say to the federal government that unless protections and assurances are provided with respect to jobs, with respect to Canadian participation in this deal and with respect to a continued public role in this company, he is prepared to do everything in his power to stop that deal from going through before Christmas, which is the intention of the CDIC.

3:10 p.m.

Hon. Mr. Peterson: Let us be very realistic about this situation. It is our view, and we have canvassed the options, that we do not have the power to stop this sale. We can shout. The member accuses me of being too soft. I consider myself an agreeable sort of chap with respect to most deals.

I think we put forward in very clear ways the position we had on this matter. The federal government knows that, and it made its own decision with its own asset. We do not have the power to challenge it in the courts or to stop it legislatively. The reality is, it is the federal government's and it has made its decision.

The member's party and the other party opposite will want to convey their view to the federal government and I will convey it for them. The member's view on the matter is very clear. I am not sure what the view of the official opposition is; if it ever tells me what its view is I will be very happy to convey that to the Prime Minister for his study.

Interjections.

Mr. Speaker: Order.

GOVERNMENT ADVERTISING

Mr. Baetz: My question is directed to the Minister of Natural Resources and arises from an incredible, shameless, self-congratulatory ad that appeared in the Ottawa Citizen on Friday, December 6. Under the picture of the minister there appears a long litany of all the good things he believes he and his ministry are doing.

What possible useful public purpose does the minister feel is served by this self-preening advertisement? How many similar ads has he placed or does he intend to place in other newspapers and at what cost to the taxpayers? I will send him a copy of the ad.

Hon. Mr. Kerrio: That is an excellent question. It points out the problem that exists across this great province of ours as it relates to public information about my ministry. When we were out with the professional foresters of Canada at a very important forum they realized the same thing; that there was much public opinion that was not based on fact.

I propose in the next short while to let the public know what is happening in my ministry. It will help us make the forests what they should be for future generations.

Mr. Baetz: What the minister is saying is that he is going to spend more of the taxpayers' money on his self-preening ads.

Does the minister not agree this is the kind of advertising that was described by the Treasurer (Mr. Nixon) as a private member back in October 1982, when he said, "When money is spent in this respect and in such a way as to obfuscate the issues, then there cannot be a more dangerous wastage of public dollars"?

I want to quote the observations of another of his colleagues, the member for St. Catharines (Mr. Bradley), who said in 1984, describing this kind of ad: "This is a wrongful use of government funds. It is self-congratulatory advertising with the taxpayers' money."

In view of the fact the minister's ad is so clearly of the type described by his own colleagues, who stated it would not be condoned when they were the government, will he promise this House that he will desist from such scandalous self-congratulatory advertising in the future?

Hon. Mr. Kerrio: I am not sure the honourable gentleman heard my answer. I could not possibly make such a promise. The public out there deserves to know what is happening in this very important ministry. There are some 80,000 direct jobs and another 80,000 to 100,000 spinoff jobs. The forest provides tremendous opportunities for the people across this province. I want to let the public know what is happening there and how we are going to improve the northland for those northern members.

Interjections.

Mr. Speaker: Order.

FOREST MANAGEMENT AGREEMENTS

Mr. Laughren: My question is also to the Minister of Natural Resources on the unbelievable statement he made earlier today and the report he tabled, which indicates that more than one third of the cutover land of the four companies referred to in the report was not regenerated. That one third represents about 100,000 acres. Under what perverse set of forest management standards is that an acceptable figure?

Hon. Mr. Kerrio: I am sure the honourable member will realize that our policy is to be open and to table everything we have. The critic was given this report, as was the critic for the official opposition, at 11 o'clock this morning, something that is very unusual, so it could be studied, so the things that bother the member could be brought to this minister and so I could respond on that particular area.

The member knows full well we are not going to concentrate in the early stages strictly on the cutover. There are places that have been cut that are going to be regenerated in a natural way. There will be targeted areas, because it makes much more sense to be able to grow trees in areas that will be very productive and accessible. I cannot consider anything else but real management of the forest for the immediate future.

Mr. Laughren: It was the great joy with which the minister presented the depressing figures that bothered me so much. Does he not understand how misleading those figures are? Does he not understand that 60 per cent of the land the companies left to regenerate naturally was clear-cut in the first place and how difficult it is to get a good second forest after you have clear-cut?

When is the minister going to understand he is being fed numbers by his officials that are designed to protect the previous government, not the forests of the province?

Hon. Mr. Kerrio: I will not deny there are areas that need investigation. Quite properly, that member and members of the official opposition have a feeling about the forest and where we are headed in the regeneration for sustained yield. I am not suggesting I am going to accept all the numbers that were passed on to me.

It is very obvious that if this government undertook to bring in Dr. Baskerville to do a private inventory, which he is going to start within the next week or two, the member can rest assured I am not going to take the numbers from that group. I am very properly going to make an assessment of that circumstance with a very credible doctor from the University of New Brunswick, and we are going to share all those reports with all people in the Legislature.

SUNDAY TRADING

Mr. Epp: I have a question of the Attorney General, who is no doubt aware that a number of businesses in Ontario, including Robinson's and the Brick Warehouse, are flagrantly violating the Retail Business Holidays Act by opening on Sunday. Some of them have violated that bylaw on a number of Sundays. Is the Attorney General aware of this fact; and second, what is happening to enforce that bylaw?

Hon. Mr. Scott: As members of the House may know, in March the Supreme Court of Canada will begin consideration of the question, is the Retail Business Holidays Act of Ontario constitutional? It is a fascinating question raised by the legislation introduced by the previous government. That issue will be argued in the Supreme Court of Canada in March, and it is hoped a decision will be given shortly thereafter. The Alberta act has been found unconstitutional.

3:20 p.m.

As we move towards that date, a number of businesses have obviously determined it would be in their interests to breach the law because it is unlikely their cases, when they are charged, will come to court before that March date. I want to indicate to the House that we are going to defend the law in so far as we can in the Supreme Court of Canada, and businesses that remain open on prohibited days between now and March will be prosecuted. If they remain open more than once, the maximum fines will be requested under the legislation and we will give consideration to proceeding with those cases at the earliest possible date.

At the end of the day, after the Supreme Court of Canada has decided the matter, if it is found the legislation is within the power of this Legislature, we propose to give consideration to whether it should be modified in the circumstances of the case and at that time look forward to hearing views from all parts of Ontario.

Mr. Davis: I have a --

Mr. Speaker: Order. Supplementary.

Mr. Epp: If the Supreme Court --

Mr. Timbrell: Mr. Speaker, on a point of order: I may be mistaken, but I am certain the member for Scarborough Centre (Mr. Davis) was on his feet, having been recognized by you, and had begun to ask a supplementary. I fail to understand why he will not be allowed to complete that question and ask you to allow him to proceed.

Mr. Speaker: Order. The member knows the general rotation. Sometimes those rotations change under certain circumstances.

Interjections.

Mr. Speaker: Order.

Mr. Epp: If the Supreme Court supports the present legislation, what are the options available to the government if that support stands? What are the government's options if the court says the act is in violation of the Constitution of Canada?

Hon. Mr. Scott: The answer will depend on the reasons they give. Broadly speaking, if they decide the legislation is unconstitutional, that means there will be unregulated holidays on Sundays in Ontario, just as there currently are in Alberta. Subject to employment standards legislation, any business can stay open and it will not be within the power of this Legislature to do anything else.

If they decide the legislation is generally valid, then it will be for the Legislature to decide whether the act should be modified to reduce the exemptions, expanded to increase them or whether some other plan of regulating holidays should be developed.

Mr. Davis: I have been informed by various proprietors in my area they have been told that, even though stores are open in contravention of the bylaw, they will be charged only once in the courts, not as many times as they have broken the municipal bylaw. Is it the intention of the government to charge them only once -- it is a $10,000 fine -- even though they have been open five and six times, breaking the law?

Hon. Mr. Scott: I do not know who has been informing the member, and he has not told me, but that is not the policy of this government. In so far as the police ascertain that stores are open, we intend to charge them.

Mr. Swart: The minister will realize those stores which are breaking the law are reaping the benefits and those abiding by the law are being penalized. Is he notifying all the police forces in the province they must lay charges against stores that are staying open? Will he personally notify those companies, particularly the chains that are staying open, that they will be prosecuted to the fullest?

Hon. Mr. Scott: Yes.

HUDSON'S BAY CO.

Mr. Harris: I have a new question, Mr. Speaker, unless there is somebody else who is supposed to be on his feet and you want to recognize him.

I have a question for the Minister of Industry, Trade and Technology. It concerns a brochure of which I have a copy here. The pamphlet says on its title page, "Government of Ontario, Ministry of Industry, Trade and Technology, the Right Honourable" -- I am not sure how he ended up there, but he may have other plans that we do not know about -- "Hugh O'Neil, Minister."

When one opens this pamphlet up, it cordially invites buyers to attend the Hudson's Bay Co. December auction, etc. It has an offer of a free flight and what not from Ottawa to Toronto to go to the auction.

Can the minister tell us what his involvement is with the Hudson's Bay Co.? To what extent is his ministry -- and the minister himself -- involved in the free travel offer to Montreal buyers to attend the Hudson's Bay fur auction in Toronto?

Hon. Mr. O'Neil: If the member would be good enough to send a copy of it over to me, I would be very pleased to have a look at it.

Mr. Harris: I will allow a little time for the page to deliver that to the minister. The first panel is the headline.

While the minister is looking at that, I might ask him two things. First, does he feel it is appropriate for a minister of the crown to lend both his personal support and that of his ministry to the Hudson's Bay Co. offer of free flights and what not? This offer went out in the minister's name two days before the Ontario Trappers Association sale in North Bay.

Second, what does the minister suggest I tell the 16,000 members of the Ontario Trappers Association about his government's and his personal involvement in supporting the Hudson's Bay Co. at the expense of the North Bay fur auction run by the 16,000-member Ontario Trappers Association?

Hon. Mr. O'Neil: I can tell the member I have not seen this before, nor have I approved of it. I will definitely check into it, because I agree with the comments he is making.

REMOVAL OF WINES

Ms. Gigantes: I have a question for the Minister of Consumer and Commercial Relations. I have invited several dozen friends to a wine and cheese party on Friday. Can the minister tell us which wines the Liberals will be serving at their fund-raising functions this week so that those of us who are not Liberals can drink wines as least as pure as those the Liberals will be drinking?

Hon. Mr. Kwinter: If I could have the indulgence of the House and have us revert to statements, I would not mind addressing this whole problem. However, it is fairly lengthy and I do not want to give an answer that would detract from other members' rights to have question period.

Mr. Speaker: Order. I did not understand. The minister asked to revert? I was not clear about whether the minister asked the permission of the House to revert.

Hon. Mr. Kwinter: The member asked me a question and I am saying the answer is fairly lengthy and complicated. Rather than give it, if we could revert to ministerial statements I would make that statement and not detract from the members' time in question period.

Mr. Speaker: I will have to ask the members whether they wish to revert at the request of the minister.

No, there is not unanimous consent.

3:30 p.m.

Mr. Swart: The minister said in front of the cameras yesterday that people should refrain from buying wine for a couple of days until the retesting of the suspected wines was completed.

Does the minister not realize that statement was unwise? Perhaps it was even foolish, creating confusion among purchasers and stopping purchase of all wines when most of them have already passed the new standard. Why did the minister not notify the Liquor Control Board of Ontario stores and the private wine stores to stop selling the wines in question?

Hon. Mr. Kwinter: If I knew which wines fell into that category I would have done that. The question asked of me was whether I could guarantee that all the products at the LCBO were within the accepted levels of ethyl carbamate and I said no. The next question was, "What would you advise consumers?"

If the member read the reports in the media, he will have noticed that the problem with ethyl carbamate is cumulative. I have said that if anyone drinks a bottle of wine it will not be fatal. Notwithstanding that, all consumers in this province have the right to know if they are at risk. If they are concerned, the only sure way of knowing is not to buy the product until we give them the names of the products that are safe.

ANNUAL REPORT, PROVINCIAL AUDTTOR

Hon. Mr. Keyes: I have a response to a question on November 28 by the member for Algoma (Mr. Wildman) with regard to the Provincial Auditor's report as it related to the storage of weapons and ammunition by the Ontario Provincial Police.

I can assure the member that every step has been taken to ensure the security of both weapons and ammunition. These steps include the installation of alarm systems with backup monitoring capacity. In addition, personnel from the Ontario Government Protective Service are on duty 24 hours a day. It should also be noted that access to the facilities is strictly limited and the movement of firearms and ammunition is now fully documented.

At the convenience of the honourable member, we would be pleased to have him view the facilities to see these installations.

Mr. Wildman: I thank the minister for his answer.

Can the minister assure us that the OPP is taking responsibility for ensuring that these dangerous weapons and ammunition are being secured according to the federal legislation? Surely the OPP could be expected to follow the legislation on gun control.

Hon. Mr. Keyes: Yes, I can give that assurance.

MEDICAL TRANSPORTATION

Mr. Pope: I have a question for the Minister of Health, who admitted last week he had failed to implement the northern health travel program over a period of six months before he announced his own program.

Hon. Mr. Bradley: He did not admit that.

Mr. Pope: Yes, he did. He was the minister. I have reviewed the statements by this minister in the Legislature on November 25 and his statements from last week. I have also reviewed the documentation on the health travel grants to northern Ontario residents.

Why has the minister yet to inform the residents of northern Ontario that under his plan they have to pay the first $75 of that cost of travel?

Hon. Mr. Elston: The program we have devised for the people of northern Ontario is a more comprehensive program than was ever contemplated by the party opposite when it was in government. For one thing, their program would have kicked in at the limit of 200 miles; ours goes at 300 kilometres, which is under the 200-mile limit.

We have done several things that will provide more coverage. Their program would have provided transportation for about 4,400 people; ours is estimated to accommodate the needs of 81,000 people in northern Ontario. In addition, we have done several other things to improve the accessibility of northerners to medically necessary services, not only services based in hospitals but also for specialists.

Our program is much more intensive and much more deserving of support in northern Ontario than the program the Conservatives contemplated. It has a great deal more coverage and more benefits than they anticipated providing.

Mr. Pope: I asked the minister a question and I have yet to have the answer. Why has the minister not informed the residents of northern Ontario they have to pay the first $75 of travel costs under his program? Why has he not told them?

Hon. Mr. Elston: We are reimbursing people on the basis of a grant for travel. We are basically doing work now which will provide those people with some transportation assistance. It will cover more of the travel requirements of the people of northern Ontario than these people even contemplated.

It is absolutely clear that our program will cover the travel needs of those people who have to have follow-up in addition to the first visits. Although these people tried to tell the people of northern Ontario they were concerned, they had several years to implement the program. They had wonderful suggestions made by the member for Port Arthur (Mr. Foulds).

I cannot debate with the honourable members of this House the desire of people from northern Ontario to have this program for a long time. I do not wish to question anybody's intent, but I can question the results.

I can tell the people of northern Ontario and the people of all Ontario that we are providing travel assistance for medically necessary travel in the province -- in northern Ontario and to centres in southern Ontario -- which these people were unable to implement. They did not have the funding to do it. We have come across with the program.

Mr. Pope: On a point of order, Mr. Speaker: The minister has not answered the question. Am I going to get an answer?

We are going to have a late show because the minister is not going to answer the question.

Mr. Speaker: Order. That is a very good point of order. If the honourable member reads the standing orders -- it is under standing order 28 -- he can follow that rule.

Mr. Pouliot: Does the minister realize that if we put the riding of Kenora and the riding of Lake Nipigon together, we are talking about approximately 45 per cent of the land mass of the province, and yet the minister's program regarding northern travel fails to incorporate more than 60 per cent of the people in those two ridings? It runs contrary to the intent of his program.

If the minister is aware of this, does he plan to rectify those anomalies very soon so that the people for whom the program was intended can, at long last, benefit from his intentions?

Hon. Mr. Elston: The member for Lake Nipigon has made the point that there have been exclusions. I cannot tell him that we can put everybody in the province into the travel program. We are working at implementing the program on the basis that we will provide transportation for those people who live in remote centres a long way from medically necessary services.

I told the member in estimates and I told other members, including the member for Kenora (Mr. Bernier), that we want to implement this program well. We will consider other additions to the program. Right now, we are entirely committed to ensuring that those people who are more remote than 300 kilometres are going to be covered for medically necessary travel. That is a commitment we have made. It will be implemented. It is implemented. We will be looking at other needs of the people of northern Ontario as we continue to do.

USE OF TIME IN QUESTION PERIOD

Mr. Mackenzie: On a point of order, Mr. Speaker: I ask you to take a look at what happened in the House today. There were 21.5 minutes spent on the leader of the official opposition's question, and a total disrespect and an arrogant disregard for the rights of other members to ask questions in this House --

Mr. Speaker: Order.

Mr. Mackenzie: -- as well as an obvious attempt to intimidate the Speaker.

Mr. Speaker: Order. Time for oral questions has expired.

3:40 p.m.

NOTICES OF DISSATISFACTION

Mr. Baetz: I was dissatisfied with the totally facetious and flippant answer I received from the Minister of Natural Resources (Mr. Kerrio) on a very important question. I wish to pursue this further on the adjournment of the House tonight.

Mr. Pope: Mr. Speaker, I am dissatisfied with the answer given to me by the Minister of Health (Mr. Elston), which was a nonanswer. I have signed the documents to voice my objection and I desire leave to discuss this matter this evening.

[Later]

Mr. Speaker: Before I recognize any other speakers, I inform the House that pursuant to standing order 28, the member for Cochrane South (Mr. Pope) has given notice of his dissatisfaction with the answer to his question given by the Minister of Health (Mr. Elston), and also the member for Ottawa West (Mr. Baetz) has given notice of his dissatisfaction with the answer to his question given by the Minister of Natural Resources (Mr. Kerrio). These two matters will be debated at 10:30 p.m.

PETITION

ROMAN CATHOLIC SECONDARY SCHOOLS

Mr. Pope: I have a petition signed by 150 residents of Cochrane South, which reads as follows:

"Ontario is a multiracial, multicultural and multifaith society that is well served by a strong public school system. Your government's proposal to extend public funding to Roman Catholic separate secondary schools is a backward step since it will grant special status to one specific denominational group.

"I/we urge you and your government not to proceed with this divisive proposal."

It was prepared by the Coalition for Public Education.

REPORT

SELECT COMMITTEE ON ENERGY

Mr. Andrewes from the select committee on energy presented a report on the Darlington nuclear generating station and moved adoption of its recommendations.

Interjection.

Mr. Andrewes: The member for Sudbury East (Mr. Martel) is provoking me, Mr Speaker.

In presenting this report, I want to acknowledge the hard work and diligence of the members of the committee. It was my first experience on a select committee and I think the first experience for a number of members in that kind of forum. The committee had a fair challenge offered to it by the Legislature. It accepted that challenge and worked diligently at achieving its goal in a timely way.

In making these remarks, I say a special thank you to the members of the committee for their co-operation, assistance, diligence and forthrightness. As well, I would be remiss if I failed to thank the members of the Legislative research service who assisted in the preparation of the report and who provided documentation and information to the members of the committee throughout our debate and consideration of this matter; and also Mr. Carrozza, the clerk of the committee, who looked after all the incidentals and provided accurate details for the committee's work.

Hon. Mr. Kwinter: I am pleased to introduce for first reading a bill that may help meet the shortage of qualified operating engineers in Ontario. As some members are aware, operating engineers are provincially certified specialists who operate boilers, compressors and refrigeration plants.

The Operating Engineers Amendment Act before you today will allow engineers certified by other Canadian jurisdictions to apply for an Ontario certificate at the same level. It will also eliminate the need for a one-year provisional certificate for out-of-province operating engineers who come to work in Ontario.

The change should make it easier for Ontario employers who must look outside this province to staff their plants with qualified operating engineers. Ontario currently does not recognize existing grades of operating engineers as certified in other provinces, even though they are equivalent to the Ontario grades.

Under the present act, engineers certified elsewhere in Canada only qualify for an Ontario certificate at one grade below their existing class. They must first apply for a one-year provisional certificate and then a permanent certificate, neither of which recognizes their existing grade based on education and experience.

I hope members will support this change to allow operating engineers to be hired in Ontario at the levels of competency they have established in other provinces.

ORDERS OF THE DAY

REGIONAL MUNICIPALITY OF HAMILTON-WENTWORTH AMENDMENT ACT

Hon. Mr. Grandmaître moved second reading of Bill 24, An Act to amend the Regional Municipality of Hamilton-Wentworth Act.

Hon. Mr. Grandmaître: This legislation will achieve two goals. First, it will enable the city of Hamilton and the region to separate the assets and liabilities of the Hamilton municipal employees retirement fund, HMERF, which currently covers long-term plan members who are employees of either the city or region. This will allow the city and region to administer their respective portions as separate plans.

Second, it will provide a vehicle for the transfer of plan members to the Ontario municipal employees retirement system, OMERS, by either the city or region if they so desire.

Both the city of Hamilton and the Ontario municipal employees retirement system have been consulted and are agreeable to the changes.

Mr. Dean: I am very pleased to see that the minister has responded to the urgent requests from the region and city to introduce this bill. Let us hope it receives speedy approval today. It is in the nature of a housekeeping bill to the extent that no great change in policy is involved. It is extremely important to the region, the city, and more particularly to some of the retirees who will be covered by its provisions, that it receive complete passage today.

The minister has indicated what its real objective is, namely, to permit the Hamilton-Wentworth regional council and the council of the city of Hamilton to separate the assets and liabilities of the present Hamilton municipal employees retirement fund into two groups to correspond to the two groups of employees.

Most members who have gone through a regionalization will realize that many employees from lower-tier municipalities ended up as regional employees because the functions they performed became regional responsibilities. That is precisely what occurred in the Hamilton-Wentworth region. Many people who were in the provision of hard services, such as regional roads -- formerly county roads -- water, sewers, planning, some personnel and finance functions and others, became regional employees. With them went the pension assets they had in the privately organized Hamilton municipal employees retirement fund, which was in existence before the province-wide creation of OMERS.

This has been a long time, shall we say, in generation, but it is a very worthwhile activity. I am pleased the minister has responded to our representations that it needed to be given speedy treatment.

3:50 p.m.

About 80 per cent of the employees are already under OMERS in the regional system and 20 per cent are under the HMERF plan. It is that 20 per cent about which we are particularly concerned. They are people who were working for Hamilton prior to 1963 but who are now regional employees.

The situation is that there is a desire on the part of the employees to transfer their benefits to OMERS with suitable adjustments. As the minister has said, this has had complete discussion with the officials of OMERS, and the municipalities themselves are in agreement.

In anticipation that this would come about, because it was first introduced in June under the minister of the day, the member for Don Mills (Mr. Timbrell), contributions have been made by the affected employees where there are still living employees -- we are not talking about retirees or people who are receiving death benefits -- since the first of this year on the basis of the OMERS premium; so there is no cost to the province in this happening.

There are, however, two or three cases of people whose spouses were employees of the region and have passed away, who will not receive benefits under OMERS until this bill is passed. That is why it needs to be done as quickly as possible. Because the bill is retroactive to the first of this year, there will be no penalty to the people involved if it is given speedy passage.

Why is today so important? We are caught in a counterbind in the sense that the last meeting of the old regional council is tonight and it would like to wrap up. The inaugural meeting of the new council is tomorrow, but its next regular meeting, when this sort of business would normally be dealt with, will be some time later in the month. If this is not passed today but on Thursday instead it will result in further inequity and inconvenience to many of those people.

Everything is in place awaiting the passage of the bill. The bylaws for both the city and the region, which are referred to in one of the sections of the bill, have been prepared in accordance with the requirements of OMERS and can be passed tonight if we give them the green light.

I think everyone wants this. The councils are in agreement and the employees through the unions are in agreement. I see no reason we should not be in agreement and I urge speedy passage of the bill today.

Mr. Mackenzie: I rise in support of the passage of this bill as quickly as possible. The bill does allow the splitting and transferring of funds, along with groups of employees, and the transfer of some to OMERS. It is an example of a bill that gets caught up occasionally in the bureaucracy around here and that has negative effects on individuals in the municipality of Hamilton-Wentworth. There are widows who are uneasy because this bill has not been passed through this House.

The city council and region have given their bylaws two readings. They are waiting for the final reading of the bill. The only people who are going to be hurt if we do not expedite this piece of legislation are pensioners and the widows of pensioners in the Hamilton-Wentworth region.

Motion agreed to.

Third reading also agreed to on motion.

GASOLINE TAX AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 51, An Act to amend the Gasoline Tax Act.

Mr. Dean: I am pleased to rise as probably the last speaker on this part of the bill, from our caucus at least. I do not know what the other caucus is going to do. This has been before the House for some time and it has had more or less a thorough airing, but the biggest erring, and that is spelled the other way is in the draftmanship of the bill. The Minister of Community and Social Services (Mr. Sweeney) thinks that is going to do in the social service program in the province. I am sorry it has had that effect, it was not intended.

Just to review, because it has been all of 18 hours or thereabouts since this matter was last discussed by one of my colleagues, the tax that is proposed in Bill 51 on gasoline in Ontario does do something with what we have become accustomed to in the past. Currently, the province collects a tax that varies with the value of the product, a so-called ad valorem tax, similar in principle to sales tax, income tax, property tax and many other taxes we might list. They vary in the size of the collection according to the value of the material we are taxing.

There is no mystery about ad valorem except that those are two Latin words that perhaps we would do well to dispose of. Perhaps that would be something else for the government to consider now that it is getting rid of QCs. It could also get rid of Latin as a lingua franca of the legal community. I think the Treasurer (Mr. Nixon) would go for that. I see him smiling.

Hon. Mr. Nixon: You took Latin and so did I. It distinguishes people of a certain age.

Mr. Dean: We are a vanishing species, I say to the Treasurer.

Whether one wants to call it ad valorem or so much per unit value, the tax that prevails now is charged on the basis of the value of the product taxed. It is a 20 per cent rate, which has been in existence for some years, but the amount was frozen by the former government approximately a year ago or more at the present flat rate of eight cents per litre of gasoline. That is for one type of gasoline. There is a different rate for the different qualities: 8.0 cents for leaded, 8.4 cents for unleaded and 8.6 cents for the premium.

This bill, as is very obvious from reading the relevant sections, would increase the rate for all grades of gasoline to 8.8 cents per litre and at the same time would automatically remove the ad valorem process of calculating the tax.

This increase ranges from approximately five per cent to 10 per cent in the rate of tax over what we are paying at present. I believe this is not a good move. I can see it is a matter of opinion as to whether ad valorem or flat rate is the proper way of taxing. I accept the right of some other group to say flat rate is better than ad valorem rate. I do not happen to agree with that and I will tell the members why in a few moments.

4 p.m.

This government is proposing to get rid of what it thinks is a wrong way of taxing; that is, according to value. Again, I will not press anyone to justify why that is particularly bad on gasoline, if it is okay on sales, incomes, etc. That is an inconsistency that can be dealt with later. Perhaps in a further budget we will be treated to an explanation of why the sales tax should be a flat rate of so much rather than a percentage of the value.

Anyway, that is something for which I know the Treasurer, who is a very logical thinker, probably has a good answer.

Hon. Mr. Nixon: I have a feeling the member for Wentworth, as a logical thinker, has answered his own question.

Mr. Dean: I am not sure, in responding to the interjection -- which I should not do -- whether there was a question. There was puzzlement.

In any case, I do not regret that someone has another point of view, but I do still very much reject the idea that at the same time as the way the tax is calculated is changed it is also bumped up from what it is now. That is pretty hard to take, particularly when, if the way the tax is calculated were left the same -- and it may still be left the same if the Treasurer is persuaded by all the eloquent arguments that have come from this caucus; who knows? -- one of the benefits would be that when the price of the fuel went down obviously the tax would go down, just as when the price of fuel went up the tax went up. That is pretty simple mathematics.

There is growing evidence, which we see in reports every day, and more especially one of yesterday, that the actual costs of gasoline and of all kinds of petroleum products are likely to go down rather than up in the next period. It would therefore seem to be very wise of the government, instead of tampering with a system that has been in effect for some time, to let it remain. The consumers of gasoline in Ontario, who for many years up to the present have been faced with a generally upward trend in the price and therefore in the amount of tax, could then not only benefit from a decline in the actual market price of gasoline but also have the further benefit of having to pay less tax per litre, per gallon or whatever way one likes to calculate one's gasoline consumption.

It is estimated the maximum cost increase through the principles and the changes the government is proposing could come to a significant amount per year for a person who drives a car on an average basis. I am not talking at this point about the person who uses it every day of his life to drive several hundred kilometres, such as a travelling salesman or someone else who does a great deal of driving. I am talking about the ordinary person.

We can include in the calculation for an ordinary or average family group the costs of driving to and from work, which could be as much as 50 kilometres away from one's residence; it might even be farther, but that is a good average to take. For people like this, driving a car is not simply a pleasure activity, although there are times when it is; it is an integral part of their way of seeking and continuing to have employment. Therefore, we will have to agree it is an essential part of everyday life for hundreds of thousands of people in this province.

This is even more noticeable in places outside the major urban centres in which adequate public transportation may be available. The cities of Toronto, Hamilton, Ottawa, London, Windsor, Sudbury and others to a greater or lesser extent, if they do not have absolutely 100 per cent appropriate public transit do at least have a very good start at it and are working at it as their means, and as our means as a provincial government when we subsidize a good bit of their deficit, permit us and them to accommodate and actually afford it. In those communities, while fuel is obviously being used, the main fuel in public transit is not gasoline. We covered very thoroughly the effect of the increase in tax on diesel fuel in a previous debate.

In other communities in Ontario, and the community I come from is an example, although we have some public transit we are not completely transitized yet. However, in most communities, those from which many members of the Legislature come -- Mr. Speaker, I venture to say your own community almost qualifies to be one of those not exactly overserviced by municipal transit -- private automobiles in whatever form, and sometimes even taxi services, which also largely use vehicles powered by gasoline, are the main ways people have of getting around.

Let us start with getting to and from work, with the amount of traffic on the roads in any of our communities in the morning and afternoon rush hours, which are the principal times for people going to and coming from work. In the case of a community such as Hamilton-Wentworth, there is a great deal of shift work and there are more than two rush hours a day; there is at least a third rush hour when the night shift comes to work and the afternoon shift goes away from work. The traffic one sees on the streets and highways around the cities and towns where this kind of travelling to employment is absolutely essential should convince all of us that the need to have an automobile to get to and from work is absolutely paramount to continue the employment that most of us need to earn our daily bread.

Once in a while we see a poor, unfortunate person who has had something happen to his or her car trying to get to work in the morning by hitchhiking along the road. I am sure most of us, provided we have not had a bad experience with someone trying to rob us when we have picked him up in the past, would stop out of Christian, Hebrew or Muslim charity, or any other kind of religious charity, and give that person a ride, knowing he or she no doubt tried to get the car going. Maybe he had a dead battery, a flat tire or something else. Maybe he was actually out of gasoline. That could happen because sometimes the gas gauge is not accurate. Such a person is in a bad way if he or she does not get extra help where there is no transit service, because the gasoline-powered automobile is about the only way a person can get to work.

There are other aspects of the essential nature of the family automobile. I think I will confine myself mainly to that source, although I recognize that the person who depends on the automobile absolutely for a living is very important. I would class that person as a special case of the person I just described who has to get to work at specific times each day, such as a travelling salesman, a consultant doing a lot of travelling or all the people who are in their automobiles a lot more than we normally are. Of course, they do not normally have drivers as the Treasurer and others on that side of the House frequently have.

We also have to include on the list people who depend to an even greater extent on the automobile to serve the way they make their daily bread. Farmers have trucks that may use diesel fuel and do not come under this, and few of them have gasoline-powered tractors any more, but they do have smaller trucks and automobiles.

4:10 p.m.

For those members who have never operated a farm, I would like to mention that those smaller vehicles, which are capable of easy driving on the road, are absolutely crucial to a farm operator in any season to some extent, but especially so in the busy season. If part of one's farm machinery breaks down, one has to go anywhere from five to 55 miles -- that is, nearly 90 kilometres -- to get a replacement part. The downtime is very precious if one's machinery cannot operate. One does not go by passenger pigeon. It is usually not practical to get the bus or some other courier to get the part. Anyway, their vehicles may be powered by gasoline too. Normally, if there is a second person around the place to send a farmer prefers to get that person to go in the pickup truck, car, or whatever one has, to get the part while the farm operator does some more of the valuable stuff he has to do.

In those crucial seasons of the farm cycle there is no time to wait around for some part to make its way by a slow, ordinary process. It is absolutely essential the gasoline the farmer has to spend to get this does not cost him unduly. I mention that on behalf of the person who is so dependent on the availability of gasoline and who is hoping the price does not go out of sight.

When that person reads the news, he is probably hoping the Organization of Petroleum Exporting Countries will make sure it retains its market share and overproduces a little to make sure gasoline is available, thereby driving down the price. He is hoping to have a chance to save not only on the price of the gasoline but also on the tax. Alas, that pious hope will be thwarted if this infamous bill is passed in its present form.

I wish to stress the importance I touched on in a way when I was describing what a farmer has to do to get a part in a hurry. That could apply to any small businessman. It does not have to be a farmer. Whatever one is operating, if one of the machines so essential to the carrying on of one's business breaks down and has to be replaced or repaired, one either goes to get the part oneself or one gets a repair person to come.

Let us think of the thousands of delivery trucks and cars that are sometimes operated as a business or as an adjunct to another business which will deliver to other businesses or homes everything from flowers to furniture, newspapers to food, important parts for a shop to important medicines for a person in dire need of them. These people will all have to pay extra tax money under the proposed bill unless it is seriously modified.

Small business itself will be hit hard by the kind of tax that is now not going to reflect a possible lowering in the price of gasoline. I would like to quote an authority, not on small business but on people who work in other businesses, who has expressed his opinion on this; no less than Clifford Pilkey, who is well known to the members of this chamber and to many people beyond it.

I have had the pleasure of meeting Mr. Pilkey on various occasions and found him to be a very shrewd and perceptive person, no more so than in this comment he made regarding the budget of the Treasurer, and particularly the effect it may have on business.

"The Liberal budget has made token gestures to almost every segment of society but its priorities are not straight." That is what I call a straight comment. "Token gestures" are something for surface perception, nothing significant and in the wrong direction. That last part was my comment.

I return to Mr. Pilkey's quotation: "The government is cutting back on the job creation potential. That is hardly the way to go when the private sector will create 44,000 fewer jobs in 1986 than it did the year previously."

I cite that to show there are people outside this chamber who presumably take a fairly balanced view of these things and who say the budget in general and this tax we are talking about now are misguided and will hit certain small businesses hard.

Another item I want to touch on briefly before I come to the conclusion of my comments is what it will do to the personal shopping of a family.

Some people might be content to use the telephone to respond to advertisements or catalogues, saying, "Please send me X-1983 coloured green with pink spots, and it has to be big enough to suit my daughter who is aged 11." Doing it that way might satisfy some people, but most of us like to go to see the thing, to see whether the pink spots are big enough and whether the green is subdued enough on X-1983. How do we get there? If we happen to live in a place such as Metro Toronto or in some of the other larger cities in Ontario, we can take public transit. However, most of us do not go that way; in most parts of the province, we go by car, or we might go by taxi, but we go in something that is powered by gasoline.

Again, we are faced with the prospect of the government doing something that makes it more difficult -- I will not say it makes it crippling -- for the average family to jump into the car, whether it be the whole family or portions of it at a time, to go to the shopping centre, the private small store or whatever location they want to go to.

I might interject that sometimes it is not just the store around the corner in the neighbourhood. Sometimes it is one a good many kilometres away, such as the ones we hear advertised over the radio frequently that are in some places not too far, perhaps even in the riding of the Treasurer. I hear advertised, over the radio and TV stations in the Hamilton area, some stores and markets that are up in his part of the world. He should remember that some of those businesses are totally dependent on long-distance customers who get there by car, by gasoline-burning vehicles. It is going to have an adverse effect on those people as well.

As Mr. Pilkey pointed out, small businesses, these genuine job-creating sectors of our economy, are going to be hard hit by many items in the budget, but particularly this one, which they will pay for every day because of the way their businesses are so dependent on the services of gasoline-powered automobiles.

Many of my colleagues have expressed most eloquently the impact this will have on tourism. I need not go further into that except to say, as in the parts of Ontario that are so dependent on it in the north and the east, we also have many communities in southern Ontario that have a great many very desirable features for visitors to enjoy.

If visitors, especially from the United States, discover the price of gasoline in Ontario is higher than it is in the United States -- they soon will, if this proposed tax rate passes, but there is enough of a difference in any event that they will discover it -- it makes a mockery out of the award-winning tourist slogan that appears on our licence plates, "Ontario-yours to discover!" That was a real brainwave of an idea for tourism promotion. No wonder it won awards in the American advertising community.

Mr. Baetz: It won many awards.

Mr. Dean: The former Minister of Tourism and Recreation reminds me it won many awards and was a brilliantly conceived concept and slogan. Like him, I regret it appears as though the present government is not going to continue with those bright brains who conceived that award-winning slogan. We still have the slogan. We can still use that and we should keep using it. It presents that aura of a little bit of mystery, excitement and the unknown.

4:20 p.m.

What will it do to our visitors if the first thing they discover is that gasoline prices are even higher than they expected because of the imposition of a further tax? It will make some of those intrepid explorers wanting to discover Ontario decide they have made a mistake. They may either turn around after the first visit to a gasoline station and go back where they came from, or they may curtail their projected trip throughout Ontario to something much shorter. In any case we are all the losers, because we know there is a great spinoff from tourist industry revenues that benefits all communities in the province.

With the tax rate going up and the total revenue from the gasoline tax projected to rise by $50 million in the current year, an estimated increase of $50 million, we might think some of this money being taken in -- and there must be some reason for it being taken in -- would logically go towards the improvement of our highways, which are among the best in the country but can still stand further maintenance and extension. We are also informed by way of the printed budget from the Treasurer that the Ministry of Transportation and Communications estimates are not being increased by what we might think is $60 million. In fact, they are not being increased at all; they are being decreased by $34 million from last year's estimates.

If this tax goes through -- we hope it does not and we are going to do our best to see it does not -- one suspects the extra dollars that would be taken from the public purse by this increase in the gasoline tax are going to be used for some other devious purposes. That has been discussed before. We do not even get a balanced budget out of it. We get a continuation of expenditures exceeding revenues. In fact, the shortfall this year as proposed by the Treasurer is an increase from last year's $1.7 billion -- which I point out represented a decrease from the prior year; we were on a downward trend on the deficit -- to $2.2 billion. That is $500 million. That is a lot of money.

Let me illustrate how much $1 billion is. Unless we are geniuses in the financial world, it is a little difficult to grasp how much $1 billion is.

Hon. Mr. Nixon: This will be interesting.

Mr. Dean: This should be very good, I think so.

Back in the days when Antony and Cleopatra were cavorting around the Nile, if Antony had given Cleopatra a million dollars -- assuming there were some then -- and said, "Cleo, go out to the Nile Plaza and spend $1,000 a day and do not come back until you have spent it all," she would have come back three years later, tired but happy, having exhausted the $1 million.

Hon. Mr. Nixon: I understand she was worth that every day.

Mr. Dean: The Treasurer is saying she was worth $1 million every day.

However, had Antony had it in his capacity to give her $1 billion with the same instructions, "Spend $1,000 a day and do not come back until it is done," she would not be back yet.

Hon. Mr. Nixon: Would she be half done?

Mr. Dean: She might be worse than that.

It give us some kind of perspective on the difference between $1 million and $1 billion. When we are talking about $500 million, we are talking about half of that very large amount which we have now gone into hock for despite the increases in taxes such as this gasoline tax increase.

One would also think if we are trying to discourage people from using the private automobile too much, the government would continue to favour the extension of public transit, which had so much encouragement from the government of which I was proud to be a member until June of this year.

As an alternative to the private automobile, public transit seems to be about the only thing, unless we go back to walking again. We did much to encourage public transit in past years. A lot of it is still going on.

I would like to speak briefly about one aspect of it, the GO Transit system, which has been a success almost unparalleled in the annals of public transit, stretching as it does from Oshawa in the east to Hamilton in the west by the Lakeshore line, with many other radiating lines going out from Metropolitan Toronto, the centre of it all.

Living, as I do, at the fringe of the west end of it -- that is, near Hamilton -- I know that a great deal of time and energy was expended during the last few years to come up with an extension of the distance, volume and calibre of service to both the west end and the east end of the Lakeshore line.

At my end, around Hamilton, a great deal of local dispute centred on the route that was going to be used. We will not get into that at this point. There was a commitment by the present government to extend more frequent and more convenient GO train service both to Hamilton and to Oshawa.

In its desire to show activity and to go forward with proven and good programs, one would think the present government would have taken that over as it was and said: "Wonderful. This is right in line with our thinking on what Ontario should have and what the people up in those areas need."

Did that happen? No, I am sorry to say it did not. There has been an almost inexplicable delay. The whole thing seems to have been shelved. We have had statements from the minister responsible for this program that it is under further discussion and consideration, but nothing to speak of has been done for the last six months.

We are concerned in the Hamilton-Wentworth region that the kind of extended GO train service we were sure we had hammered out with the previous government and it was ready to go on is now facing a very long delay. We will be lucky if we have the extended service there in 10 years. That is not a happy prospect for any of us who know the crowded conditions of the Queen Elizabeth Way, not only during rush hours but at almost any time of the day and in early evening nowadays.

GO Transit is good as far as it goes, but we need to have the commitment of the government for more funding. If by some mischance this higher gasoline tax does go through, I hope the Treasurer will look carefully at augmenting the kind of allocations that are made to the Ministry of Transportation and Communications for GO Transit. I am thinking parochially about the west end of the system. I know it is just as badly needed in the east end, but my colleague the member for Durham West (Mr. Ashe) has spoken eloquently about that.

I want to leave members with one other thought. It refers again to the private automobile, but this time it comes from somebody who speaks much more knowledgeably about it than I ever could. This is taken from the November 1985 edition of the Hamilton Automobile Club News. I might say parenthetically that I am pleased to be a member of that great automobile club, which is one of the oldest in the province and actually predates the Ontario Motor League provincial association in its formation.

4:30 p.m.

In its latest newsletter, executive vice-president Alfred U. Oakie, who has been active in the club for many years, has this to say about the government proposal to impose this new kind of gasoline tax: "Increased gasoline taxes do impact our economy, while penalizing many motorists who need their automobiles to get to and from work every day or even to enjoy the minimum of social activity. Automobiles are not a luxury."

That underlines what I said a little while ago. This comes from an authority on the issue. I will continue quoting Mr. Oakie.

"The provincial budget brought down by the Honourable Robert Nixon" -- I should say the honourable Treasurer, but those were the words Mr. Oakie used -- "on October 24 was totally frustrating for the motorists of Ontario. The government increased gasoline taxes by up to 10 per cent, motor vehicle registration fees by 12.5 per cent and the driver's licence fees by 40 per cent. Our disappointment in the budget is sharpened by a number of reflections, including the following," and this is the thought I want to leave you with:

"For many years prior to the Liberal Party gaining power as the government body, they were most critical of the Conservative administration's practices re motor vehicle taxes. They would occasionally quote our club's," that is, the Hamilton Automobile Club's, "concern in Hansard as support for their position."

I do not know what happened. There must have been a blurring of vision at the time this item was put in the Treasurer's budget and maybe a bit of selective amnesia concerning all those good things that had been said by the Hamilton Automobile Club and quoted with approval and almost vengeance by the Treasurer in years past.

I close my comments at this time and strongly urge members to support our position that this bill should not pass.

Mr. Bernier: I join this debate and add my voice to the objections to this tax increase. While I do not want to be repetitive, I want to support very strongly what my colleague the member for Wentworth (Mr. Dean) has stated this afternoon. He has done it very clearly and concisely. I know he expresses the very strong feeling all of us on this side of the House have towards this particular tax increase.

It has been the custom in the British Parliament that when a Treasurer brought forward a tax bill, and after pressure from the opposition and further examination of his stand he changed his position, there was a time in the British parliamentary system when the Treasurer would resign. That does not seem to have been the case in the last few years, and while I will not ask for the resignation of the Treasurer I will ask before I conclude that he withdraw the bill totally.

He has, as I pointed out, reduced the gasoline tax very marginally. I think he has reduced it about a dollar per tankful, which is certainly not enough: it should be removed totally.

As one who has had the privilege of being on both sides of the House and has witnessed the introduction of a number of budgets, I recall the comments of the present Treasurer in chastising the former administration with regard to the taxes we imposed. If one goes back in Hansard, one will see how he chastised us for so-called sin taxes, the gasoline tax, and the long list of tax increases the government of the day brought forward. Today he is doing exactly the same thing.

I sat on the other side of the House for a number of years and I heard the member for Brant-Oxford-Norfolk (Mr. Nixon) come forward with some great words of wisdom. I felt strongly that when the Liberals took over the government they would be imaginative, they would be creative, they would have new ideas. They had sat here for 42 years dreaming up some new ideas as to how they could approach the fiscal management of this province.

I sat waiting with bated breath when the Treasurer stood up to give his budget address, in the hope that something would come forward that was imaginative, that was creative, that would reduce the size of the government or do away with some programs rather than just piling on more taxes. He was not very creative or imaginative. He did the same thing he chastised us for, just piling on more taxes. It is a pittance; in a $27-billion budget to put on a little gasoline tax like this is totally unacceptable.

I do not want to prolong my remarks but I want to talk about the effect this will have on northern Ontario. I believe some of my northern colleagues have made it very clear to the Treasurer that an automobile in northern Ontario is a way of life, it is not a luxury. We do not have public transportation as they do in southern Ontario. When one thinks that we have 90 per cent of the land mass in northern Ontario and only 10 per cent of the population, one gets some idea of the vastness of that great area and the necessity of having a car.

Hon. Mr. Nixon: I remember when Hudson did not even have paved streets.

Mr. Bernier: That is exactly right, but we did have some public housing coming in because we had a new sawmill. The Treasurer remembers it well. I hope he will organize a members' tour now that he is on the other side. I am sure he will because he was constantly after me to do so when I was Minister of Natural Resources.

There are vast distances in northern Ontario and an automobile is part of our way of life. I suppose it is as much to us as a job. In many instances, if one does not have an automobile one does not have a job. The two go hand in hand. It is certainly a necessity. Many people in northern Ontario have two, not always brand-new cars but a car for the wife and a half-ton truck for the husband; usually a second-hand half-ton truck to get back and forth to work and do the things that have to be done in that very large expanse of the province.

We are very dependent on automobiles. Not only are we dependent on automobiles, but during the summer months we also use gasoline in our outboard motors and in winter it is used in our snowmobiles. In many of the remote areas our native people have to rely on gasoline generators. All this uses gasoline to which the Treasurer has applied a new tax which will add to the cost of living.

The Treasurer should have some sensitivity and some concern for the native people of this province who live in that vast area in northern Ontario that has no roads, that has no connection between reservations and between communities, that depends on the snowmobile in the winter, the outboard motor in the summer and the gasoline generator in the evening to operate washing machines and televisions.

If he had given it some thought, I am sure he would have stepped back from this tax and said there must be other ways to raise this pittance in this province that has a budget in excess of $27 billion.

Mr. McCague: It is $32 billion.

Mr. Bernier: It is $32 billion. I am sorry; I am a little out on that remark.

In the course of our administration, we recognized the vast distances in northern Ontario, the increased cost of living and the increased cost of operating an automobile in the north, and we reduced the registration fee. We cut it in half. I remember when Darcy McKeough brought forward a $10 registration fee when it was $60 in southern Ontario. That showed sensitivity and concern for the large group of people who live in northern Ontario and who have to put up with the increased cost of living.

The Treasurer can do the correct thing now. We are not asking him to reduce the tax, although we think he should; the correct thing would be to wipe it out completely.

4:40 p.m.

His six per cent increase in aviation tax is unconscionable when it comes to northern Ontario because many of the people on Indian reservations depend on airplanes in going from community to community or in getting to the outside world. There will be an increase in the cost of travel and in the cost of living as people move around in the vast areas of northern Ontario.

These were poorly thought-out tax increases. The tax increase on gasoline will have a serious effect on the people of northern Ontario. The aviation tax increase of six per cent will have a serious effect on the cost of travel throughout the north. Of course, it always adds to the cost of living. It is particularly being loaded on the group of people or segment of society that can least afford it. There is nothing else we can do but condemn the government and the Treasurer for going in this direction.

I support my colleagues who are opposing this bill as strenuously as they can. The Treasurer can do the correct thing today. He can admit he has made an error. He can admit he has a conscience. He can admit he has a real concern and sensitivity for the people of this province, particularly those in northern Ontario. In honesty and as sincerely as I can, I ask the Treasurer to reconsider and withdraw this bill that will see an increase in the gasoline and aviation taxes.

Hon. Mr. Nixon: I consider myself fortunate to have received advice and comments at such length and from so many members on this extremely important bill. I was particularly impressed by the last two speakers for the official opposition, who felt the gas tax should be abandoned, in spite of the fact that according to the budget available to everyone, in the last two years of the Progressive Conservative administration it raised just under $1 billion from this tax. They dreamt it up, imposed it and established an ad valorem machine that escalated it beyond any reasonable bounds. Then they have the temerity, a word I learned last week, to stand in this place and suggest we are being unconscionable in suggesting a relatively minor increase in the tax.

The honourable members will already be aware that, in introducing the bill, I indicated that because of the views expressed by members on all sides, particularly the members from the north who spoke -- at that time they did not include the former Minister of Northern Affairs -- I felt it was obvious the bill in its present form would not pass the House. For that reason, I indicated we would reduce it so that its revenue effect would be flat.

I think the members would be interested in knowing that the revenue capability of the gasoline tax at the present rates of consumption returned to the Treasury $11.8 million a year for each one tenth of a cent per litre of tax; so it is an extremely productive tax. That accounts for the fact that under the Tory administration the tax at the present level returned about $1 billion.

The members will also be aware from perusing the budget that the commitment to transportation and communications in the province is well over $1.5 billion. It is not the practice in our government, and I certainly do not want to bring it in, that revenues be earmarked; but it seems to me there is some sense in equating, at least in general terms, revenues from road-user fees such as licences, motor vehicle fuel taxes and gasoline taxes, with the all-in revenue. As a matter of fact, under the budget, although they were not balanced, they were relatively close.

The revenue that comes from gas tax is essential to the proper functioning of the province. It is not a minor tax. It is a full $1 billion. In my view, it is going to have to change and increase with increasing expenditures, or other means of cutting costs or raising money will have to be determined. I think that should be clear.

On the whole matter of the concept of ad valorem, I believe all of us in this House understand what it means. I am not going to embark on a dissertation about its usefulness in this tax or any other; but in my view, a tax of the type I am proposing, and on which the House is about to vote, of a fixed numbers of dollars per unit injects stability, certainty and simplicity to the revenue and is democratic, healthy and worthy of the support of the members of this House.

It is not within my capability to convince the members opposite of anything. I do not know whether gasoline or petroleum prices are going to go up or down. Just yesterday and the day before the announcement from the Organization of Petroleum Exporting Countries world meeting indicated they were going to reduce their prices. Whatever effect that would have on our cost remains to be seen.

It is interesting that the cost of petroleum in Canada does not seem to be as responsive to OPEC initiatives as many people in this House would think. If one were to buy a litre of gasoline in Calgary today, where there is no gasoline tax at all, one would pay just about what we are paying here. The government does not have revenue coming in because it does not have a gas tax. That is pointed out to us frequently, particularly by Conservatives. The fact the price is the same means the petroleum companies get the difference. They charge what the market will bear.

The most recent studies we have -- and I must say they go back to August, as we do not have any more recent than that -- which were a spot-test of the price across the country, indicate the price was almost identical within three-tenths or four-tenths of a cent in Calgary as compared with this provincial jurisdiction.

Also, at the level of taxation proposed, which I believe is fair and equitable, the province still has either the second or third lowest taxation of gasoline in Canada. I mentioned these figures previously. The tax in New Brunswick for regular unleaded is 10.1 cents per litre; in Nova Scotia, it is 9.7; in Prince Edward Island, it is 10.1; and in Newfoundland, it is 11.1, etc. The argument put forward by anybody, but particularly the official opposition, seems to be absurd when they indicate that somehow there is something undemocratic or unacceptable when governments with their philosophical bent have taxes substantially higher than those that are proposed here.

4:50 p.m.

There was one comment made, particularly by the member for Sudbury East (Mr. Martel), indicating that a flat tax would have the effect of marginally increasing the tax on leaded fuel. He pointed out that was a good thing, but we should contemplate having substantially larger increases on leaded fuel. The government of Manitoba has done that. This is certainly something we have to consider for a future budget, because the evidence of the deleterious effects of lead residues in the environment are mounting and are quite convincing. Many people maintain a car that uses the cheaper leaded fuels, and I do not blame people who do that. I have even heard of people whose cars are supposed to burn unleaded fuels who disregard that requirement and dump in the other fuels anyway because it saves them a few cents.

As a matter of judgement having to do with the improvement of the environment, we should contemplate adjusting our tax to make it less acceptable to burn leaded fuels. Obviously, there has to be a general policy, I hope co-ordinated with the government of Canada, in that regard.

There were very few other items brought forward in the debate to which I feel I can respond with any particular clarification. There is no doubt this tax, for reasons that are not obvious to everyone, became the object of considerable debate. I have indicated I will bring in an amendment to reduce it so that it will be a flat tax.

The last speaker for the Progressive Conservatives, in a rather hesitant way, indicated that in British tradition -- if I had any understanding of that -- if I were to contemplate such a move it should be accompanied by my resignation. I reject that out of hand. We have stated clearly that the operation of this parliament, which I consider to be exemplary in most instances, recognizes the rule of the majority, and I believe there is nothing unhealthy about that.

I well remember the occasion when the Honourable W. Darcy McKeough introduced a substantial increase in Ontario health insurance plan premiums which was not acceptable to the opposition and he, with or without grace, reduced it substantially.

I remember the Honourable John White -- an idealist if there ever was one, a person who is always proud of the British connection, I suppose maybe unduly so -- announcing a tax on energy and justifying it by saying it was not mandatory, that anybody who did not want to pay the tax on heating fuel could simply turn the thermostat down and put on a sweater. This was not convincing for the members of the House, even for members of his own party, and he soon backtracked.

I do not see anything the matter with that. In this instance, I feel the requirement for me to backtrack is on a slightly different basis. I do not consider it an error in judgement and, frankly, I do not even consider it a breaking of the sacred accord, but these judgements are subjective. While we can have a debate on that in the future, in public or private, with or without custard pies, we will let that go to other judgements here and in eternity.

I am very glad the members of the rational opposition have indicated that, with the statement I previously made on the level of taxation, they are prepared to support this, what we might call secondary initiative.

With that, I would invite all members of the House to support this tax, which is going to enable us to pay for a number of programs we consider essential. We do not like any tax, but this is as fair and productive as most others with the exception perhaps of the income tax.

Let us ring the bells, let us vote and proceed as expeditiously as possible to our goals of justice, equity and fairness.

5:22 p.m.

The House divided on Hon. Mr. Nixon's motion for second reading of Bill 51, which was agreed to on the following vote:

Mr. Speaker: I beg to inform the House that in the name of Her Majesty the Queen, the Honourable the Lieutenant Governor has been pleased to assent to a certain bill in his chambers.

Clerk of the House: The following is the title of the bill to which His Honour has assented:

Bill 24, An Act to amend the Regional Municipality of Hamilton-Wentworth Act.

House in committee of the whole.

Hon. Mr. Nixon: Mr. Chairman, before you put the bill, the members would be interested to know that the whip for the official opposition has indicated that any votes held on amendments in these bills will not be stacked so the vote will be held without warning when the debate is completed.

I also want to inform the members that under the rules of the House, I am asking a couple of officials of the Ministry of Revenue to join me at the table here to assist me in answering questions put by the honourable members. I look forward to a productive debate in this interesting array of bills.

Mr. Bernier: This is the first time that has ever happened.

Hon. Mr. Nixon: On a point of order, Mr. Chairman: There is a voice from under the gallery saying, "This is the first time it has ever happened." This is the second time the honourable member has been wrong today. He can check with the Clerk of the House if he chooses.

CORPORATIONS TAX AMENDMENT ACT

Consideration of Bill 45, An Act to amend the Corporations Tax Act.

Sections 1 to 15, inclusive, agreed to.

On section 16:

Mr. Foulds: Please bear with me for a minute until I find some notes I made. I believe this the section that allows Eaton's and other large corporations to claim the small business tax exemption. Is that so?

Hon. Mr. Nixon: Yes, it is.

5:30 p.m.

Mr. Foulds: Is there a subsection in all this that allows them to do that?

Hon. Mr. Nixon: It would be worth while and acceptable to me at least if the debate took place on the whole section. If the member wants to take any overt action in that regard, the whole section would be dealt with. However, if we get down to some refined alternatives, I will get more specific information for him.

Mr. Foulds: Basically, I would like to know how the Treasury officials could recommend to the Treasurer (Mr. Nixon), and how he could accept the fact, that a large corporation such as Eaton's should be eligible for a supposedly small business tax exemption. I find that quite outrageous. I would have thought a populist such as the Treasurer would have also.

Hon. Mr. Nixon: It is very interesting, and I am very glad to have a chance to discuss it with the member and other shoppers.

The federal government took initiatives that I felt were quite valuable to simplify the reporting process for corporations. For us to parallel that, we had two alternatives. Since the federal government does not recognize the specific difference established by regulation for small business, we would have to have a separate structure under regulations or under enactment that would separate small businesses per se to arrange it so large businesses would not have the advantage of the lower 10 per cent rate on their first $200,000 of corporate income.

The specialists, including Gregg Smyth, who is senior budget adviser in Treasury, and Richard Gruchala, who has joined me and is a senior project leader in Revenue, had a formula that would establish this. After they attempted to explain it to me for a little while, I had a feeling it would be very difficult for me to defend it as something that was making corporation income taxes simpler and more direct, easier for business people to deal with and reducing the costs of legal and accounting advice.

An alternative was struck which I thought was useful, and that was not to have that sort of definition for businesses that are obviously big, such as the member's friend Eaton's, but it would be possible to simplify it for everybody, including Eaton's, at the lower end of their revenues.

The member was perfectly correct when he raised in question period, as he is now raising again, that for that part of their revenue, or reported income, large companies such as Eaton's would pay the lower rate of 10 per cent rather than the higher rate of 15 per cent. Therefore, they would have the advantage of being treated as a small business for a part of their revenue.

The offset was to raise the revenue level for our corporation taxes from 15 per cent to 15.5 per cent. This would compensate neatly, I thought, with the advice of the experts. By allowing large corporations to have the 10 per cent rate on the first part of their revenues, we would lose some money; actually, between an estimated $55 million to $60 million. By putting another half per cent on the regular rate, raising it from 15 per cent to 15.5 percent -- small business pays only 10 per cent -- we would recoup from big business almost the identical sum of money.

Therefore, we can say to businesses large and small that we have simplified the reporting process. It is simplified to the extent that it is estimated 170,000 small businesses can make almost routine returns without requiring either legal or accounting advice. We are talking about ma and pa businesses or, let us say, incorporated family farms and things such as that.

If such businesses are at the lower end of the revenue scale -- and incorporated family farms usually are these days -- they simply get a bill from the Ministry of Revenue, write out their cheques and send them in for $50 or $100, depending upon the status, and that is all there is to it. If they want to fill out a form and go through the routine, that is the minimum tax payable but they can do that.

I have some additional information here. The net effect of these two balancing factors is not quite identical, but it is as close to it as we can get in this esoteric business, on which I am now obviously an expert.

Mr. Foulds: I have some supplementary questions. Can the Treasurer be precise about how much revenue he gains by the extra half per cent? It seems he is saying that with respect to provincial revenue things balance out, so it does not much matter that Eaton's is getting a tax break at the lower end of the scale because it is not getting one at the higher end. However, he says, "It may be close, but no cigar." I would like to know what, in his esoteric world, his esoteric projections are on each end of the scale.

Hon. Mr. Nixon: I am somewhat embarrassed to report to the member that we missed by $5 million, but in our favour. The half per cent gives us $60 million; the simplification costs us $55 million.

Mr. Foulds: As the Treasurer knows my ideological bent, he will know I do not feel any sorrow about the additional $5 million. What he is saying, though, is that he is losing $55 million. Surely it makes some sense, in trying to establish a fair taxation system for the province, that the $55 million is from large businesses. I assume it is, or is that $55 million the total that is lost from large and small businesses?

Hon. Mr. Nixon: The amount lost by way of revenue is not lost by any small businesses, that is correct. On the other hand, the makeup is designed not to come from any small businesses, just from large ones. It is not perfect, but it strikes me as rather neat.

Mr. Foulds: It may be neat, but it may be very imperfect. Let me get this clear. The $55 million, which is the lost revenue, is lost entirely because large corporations such as Eaton's get the exemption at the $200,000 income level. Is that correct?

Hon. Mr. Nixon: That is correct.

Mr. Foulds: Then there must be a heck of a lot of other firms besides Eaton's that are taking advantage of that.

Hon. Mr. Nixon: They all are.

Mr. Foulds: How many would that be in Ontario?

Hon. Mr. Nixon: We have it narrowed down to 10,000 to 15,000 firms.

Mr. Foulds: The Treasurer has it narrowed down to 10,000 to 15,000 large firms. That means every large firm operating in the province, in effect.

When I asked the question during question period, it was my impression from the answer the Treasurer gave me that he had actually discussed a number of firms that would benefit from this tax break. The Treasurer shakes his head. Did he not discuss any specific firms?

Hon. Mr. Nixon: No. When it was discussed, though, it is interesting that people who were explaining this to me said, I think a couple of times, "Like Eaton's." I do not think it is proper for me to refer to a specific company and its effect on it. I do not want to do that, but let us say the companies that are in our minds, such as Eaton's, pay a bit more.

Mr. Foulds: What I have not been able to determine is, are all these large firms private companies such as Eaton's is?

Hon. Mr. Nixon: They are designated as Canadian-controlled private corporations. We refer to them as CCPCs in the business.

Mr. Foulds: Oh, how we pick up the jargon so easily.

Hon. Mr. Nixon: That one reminds me of another, CCCP, which is not exactly the same thing.

Mr. Foulds: It is pretty close, though.

Was it beyond the imagination of the Treasurer and his officials to devise a simple way for small businesses only to be exempt? Is that what the Treasurer is telling me?

5:40 p.m.

Hon. Mr. Nixon: I believe the alternative I described first, which was an elaborate and for me incomprehensible formula to separate the two, and one I felt I could not defend in this House, was really what the officials expected me to use, if that is not an unfair sort of attribution of attitude. However, when the discussion came on further and it became apparent there was what I considered to be a neat alternative, I went for it with enthusiasm.

I forget what the question was, but I think it is inappropriate and it is my alternative -- not that I thought it up, but I made the choice. I feel it is defensible compared with its alternative. We discussed simplifying the description of "small business" -- that is, the statistical taxation description -- which I frankly felt was going to fly in the face of an attempt by Michael Wilson and by me to simplify, which is something worth trying to do in this business.

Mr. Foulds: Let me just say -- and this is why I am pursuing a line of questioning rather than the line of a rant --

Hon. Mr. Nixon: The member should not do so. I cannot stand a rant.

Mr. Foulds: I am trying very hard not to get into a rant --

Hon. Mr. Nixon: There is no need to rant.

Mr. Foulds: -- but I find it very difficult to understand why, with all the expertise available, it is not possible to meet the objective of tax simplification and a simple definition of "small business" that allows small business this legitimate lower rate of taxation and also hits the 10,000 to 15,000 large companies with taxation, if he will forgive me, at both ends of the scale. Why is that not possible?

Hon. Mr. Nixon: The basis of the designation of the small business is something the member would understand by the name of a cumulative deduction account. This has to be kept track of as the business goes through its various fiscal years, and there are dramatic efforts on the part of businesses to keep themselves below the $200,000 profit-triggering level, where they move into the other tax level.

Upon hearing descriptions of the processes for maintaining their position below the $200,000 trigger, it was my judgement that we should not require the small businessmen who were afraid of moving into the big business category to go through those elaborate procedures, but that as they went through the process of making their returns at the truly small level of business, the area to which our sympathies are probably somewhat more strongly directed, the advantages of true simplification and reduction in their costs of doing business with the government more than made up for any fault in the principle of removing the descriptive difference.

Mr. Foulds: The Treasurer is telling me that over the years a number of small businesses crept above the $200,000 figure.

Hon. Mr. Nixon: They tried not to, because they went from 10 to 15 per cent.

Mr. Foulds: Right. He is telling me that a number looked as if they would creep above this level --

Hon. Mr. Nixon: We want them to.

Mr. Foulds: -- and they would then take steps to show a loss or not to make so much money? Like the Treasurer, I am not a Conrad Black or even an economist or a financier.

Hon. Mr. Nixon: Are we not having a great debate?

Mr. Foulds: Would the Treasurer like to -- I do not know --

Hon. Mr. Nixon: No, I really am quite convinced that the alternative I chose, from my point of view at least, is the correct one and I hope it can be supported, because it really was designed not to give a break to big business, although frankly I am not averse to that, because the engine of big business creates jobs as well as small business. However, the concept of simplification attracted me. The only criticism I had of Michael Wilson's initiative with the minimum alternative tax was that it appeared to me, as a person who fills out tax forms and hears complaints from others who do, that it was unnecessarily complicated and that there might have been a simpler alternative.

I regret that this business tends to get complicated and that there are snares and pitfalls in simplification. They are often not anticipated. One thinks it can be simplified only to find that adjustments and a new variety of tax preferences are needed to maintain what appears at the time to be fairness and equity.

I do not want to get off the track; however, I hope that in the next few years the provinces and the federal government can embark on a reform of the system, particularly under the federal-provincial tax collection agreement, which I think is worth maintaining if we can, and I hope we can, that will lead to the sort of simplification that will allow ordinary taxpayers to have a good deal more confidence in the system, so that they do not have to go down the block to H and R Block, or hire their own accountants if their incomes are higher; and so that an ordinary person can cope with the requirements of reporting to his government. I am thinking of retaining Edgar Benson for this, if he is available in the next few years.

Mr. Foulds: As we examine this clause, I am trying to determine who benefits, who suffers and the reason for the Treasurer choosing the options he chose. I understand he made the choice and has accepted the responsibility. He has given us two reasons so far: first, that he did not understand the formula his officials proposed; and second, that he thought it would be too complicated.

A third reason appears to have emerged from his discussions, namely, that businesses in effect avoided paying the higher tax by divesting themselves of some profit. In the Treasurer's words, they took extraordinary steps to remain below the $200,000 level.

Hon. Mr. Nixon: Extraordinary, but entirely proper.

Mr. Foulds: Legal. It would appear that his officials saw that as either lost revenue or a loophole. I would like to know the extent to which that was used and whether there were any projections within the ministry about the extent to which it was used, what the lost revenue was from that use, and whether any of the firms under examination would have exceeded the $200,000 figure by $100,000, $5 or $5,000. I would like to get more information in that area.

Hon. Mr. Nixon: I can assure the honourable member that the problem, which I did not then perceive as a problem and I do not believe is a problem, of people at the $200,000 edge doing things we did not feel should be done was not a matter of important consideration. The simplification aspects were thought to be valuable because they meant those people would not have to go through such significant contortions.

I should take a moment to tell the member that for a taxable income of $50,000 from a small business, before the budget the tax payable was $7,500 and after the budget it is $5,000; so the simplification for businesses at that level is significant.

5:50 p.m.

The member's point is that Eaton's also made $50,000. Let us say large companies; I do not want to have any bad friends, even among the Eatons. Like all rich businessmen they are loose fish too. At $100,000, and we are still talking small, the tax payable before the budget was $15,000; afterwards, it is $10,000. There is a real advantage to small business. We are looking at people who would be doing business in the suburbs of Thunder Bay or in Paris, Ontario.

Mr. Foulds: In the suburbs of Thunder Bay the only company doing business is the one you want to sell, the Urban Transportation Development Corp.

Hon. Mr. Nixon: Let us go around on that again.

At $1 million, which is big from my point of view, but still not huge, the tax payable before the budget was $150,000; afterward, it is $144,000. We are still looking at savings.

At a taxable income of $2,200,000, the tax payable before was $330,000; the tax after is $330,000, the crossover point.

Mr. Foulds: What is that point again?

Hon. Mr. Nixon: At $2,200,000 reportable corporate taxable income.

At $2.5 million, it starts going the other way. At $10 million profit -- there are some of those -- the tax payable before was $1,500,000; afterwards, it is $1,539,000. The distribution of reporting companies in Ontario is such that the savings, i.e. our losses, were $55 million, and the gains, i.e. more money paid by companies, all of them at the big end, all of them over the $2,200,000 income, was $60 million.

Mr. Foulds: Does the minister have a breakdown of the number of firms paying the tax below that break or crossover point and the number above that point?

Hon. Mr. Nixon: I do not have the numbers, but I can have them reported to the member some time in the near future. One measure of how many they were ought to be correlated with how profitable they are and were. The measure which gave me some confidence in supporting it is that we gained $60 million and lost $55 million.

Mr. Foulds: The Treasurer and I approach this question from opposite angles. He approaches it from the point of the provincial revenues, and he is not worried simply because he has made up his losses.

Hon. Mr. Nixon: Small businesses pay less and big businesses pay more. I thought that was explained.

Mr. Foulds: This is a point I want clarified. Has the Treasurer simply made up the revenue? Has he increased it by simplification? The series of figures he has given me indicate he has increased the tax break for taxable incomes of $200,000 and less.

Hon. Mr. Nixon: Yes.

Mr. Foulds: On average, that is a tax break of about 50 per cent from the figures he has given me?

Hon. Mr. Nixon: No. It is not that much.

Mr. Foulds: How much?

Hon. Mr. Nixon: The big disparity is at the very low end where anybody reporting anything but a routine profit would find a substantial difference. That is at the low end. Before the budget, a company reporting $50,000 profit would pay $7,500; after the budget it would be $5,000. That is a substantial, significant tax break.

Mr. Foulds: Right.

Mr. Andrewes: In the confusion following the vote we passed quickly by section 6. I would ask for the indulgence of the Treasurer, my colleague the member for Port Arthur (Mr. Foulds) and the Chairman to return to section 6 briefly so that I might be allowed to make some comments.

Hon. Mr. Nixon: I have no objection to that.

Mr. Chairman: Before we get to section 6, could we finish section 16?

Mr. Foulds: I would like to make a final point to the Treasurer. When examining his budget next year, he is obviously going to be looking for additional revenues. That is an imperative; it comes with the territory, it comes with his job.

Mr. Foulds: I think the Treasurer would like to get that comment on the record.

In the last three minutes before we adjourn, in order to deal with this section, I would like the Treasurer to satisfy my curiosity about why his officials were not able to define small business in such a way that, fiscally, he could not simplify the system and give the breaks just to them.

Hon. Mr. Nixon: My officials were able to give me a formula that they found, as experts in this area, quite satisfactory, and that they felt could be administered.

My own feeling is if I were a small businessman -- and in a way I am -- I would sooner have the tax break at the lower end, which is substantial, and the simplification of making an easy return, a routine return. I still think that is right. Do not get the idea the officials could not give me an alternative. They did not give me one I wanted to put to the House.

My experience is that the officials in Treasury and the Ministry of Revenue can do anything.

Mr. Foulds: Would the Treasurer be willing to table that formula? Would he make that formula public?

Hon. Mr. Nixon: I do not see why not. Next?

Mr. Foulds: I wonder whether we could stand down this clause then.

Hon. Mr. Nixon: Do not give me that. On the other hand, it is not possible for me to table it at this time. We do not have that here. It is a matter of discussion. I do not recall an elaborate formula. They said, "This is what we do to deal with the cumulative thing." They pointed out the problems we have already discussed here. I would be glad to have them prepare an explanatory letter about this since I have been unable to explain my point of view to the member, in spite of his probing and effective questions.

Mr. Foulds: I find that response intriguing and interesting as long as I get that explanatory note before Christmas, that is within the next few days.

Hon. Mr. Nixon: As long as the member does not intend to hold the section until then.

Mr. Foulds: No, certainly not.

Hon. Mr. Nixon: Okay, done.

Mr. Foulds: I make a final point that I find it disturbing, as I am sure the Treasurer does, that large firms such as -- and I hate to mention them because nobody has mentioned any other names -- obviously Eaton's, large private companies, and Simpsons I suppose -- Simpsons did not make any profit, the Treasurer seems to be indicating --

Hon. Mr. Nixon: I do not know.

Mr. Foulds: No; he does not know. Why do the large privately held companies get the same tax break for the first $200,000 that small businesses do? I find that very disturbing and objectionable. I am going to withhold my support for this section, although I will not vote against it.

Hon. Mr. Nixon: I know, Mr. Chairman, you are about to draw our attention to the time, but I cannot believe the member feels that way about it. The big, highly profitable firms pay more after the budget than they did before. They do not like it very much. The small firms, our kind of guys, pay less. That is a good thing.

Mr. Foulds: Okay. The Treasurer makes a very good point, but the point I also want to make is that maybe the big guys could pay even a little bit more. I would like him to consider that in his next budget.